THE 

ARTHUR  YOUNG 

ACCOUNTING 

COLLECTION 


Graduate  School  of 
Business  Administration 

Library  of  the 

University  of  California 

Los  Angeles 


SOUTHERN   BRANCH 

UNIVERSITY  OF  CALIFORNIA 

LIBRARY 

LOS   ANC^r  r*v  CALIF. 


Library 
Graduate  School  of  Business  Administration 

University  of  California 
Los  .Angeles  24,  California 


Lumber    Manufacturing 
Accounts 


BY 
ARTHUR    F.    JONES 

CERTIFIED    PUBLIC    ACCOUNTANT;    ASSOCIATE    Of 
THE    INSTITUTE  OF    CHARTERED    ACCOUNTANT* 


Second  Printing 


NEW  YORK 

THE   RONALD    PRESS   COMPANY 
1919 

40075 


COYPRIGHT,  1914, 

BY 

THE  RONALD  PRESS  COMPANY 


HF 


PREFACE 

-^ 

c\J  The  following  treatise  on  lumber  accounting  applies 
primarily  to  what  may  be  termed  commercial  lumber;  such 
as  is  produced  from  the  vast  forest  areas  in  the  South, 
Middlewest,  and  Northwest  of  the  United  States,  and  in 
Western  Canada.  Any  system  devised  for  "hard"  or 

.,  "precious"  woods  would  be  somewhat  more  elaborate;  for, 
in  proportion  as  the  commodity  becomes  more  valuable,  it 
must  be  more  carefully  guarded.  This  applies,  however, 

l      more  particularly  to  statistical  records  as  distinguished  from 

Ti     accounting. 

T)          A  system  of  accounting  should  be  flexible  enough  for 

(\j  either  a  large  or  a  small  business,  although  in  the  case  of  a 
small  manufacturer,  some  of  the  forms  and  methods  sug- 

*>    gested  will  undoubtedly  be  superfluous — or,  if  not  actually 

superfluous,  inadvisable  on  the  ground  of  economy. 
fi^  The  operations  of  the  sash  and  door  factory,  bending 
works,  veneer  works,  and  other  subsidiary  plants,  except 
as  they  affect  the  general  operations  of  the  sawmill,  have 
not  been  dealt  with.  These  involve  more  or  less  elaborate 
systems  of  cost  accounting,  and  therefore  merit  separate 
treatment. 

Lumber  accounting  has  been  hampered  by  the  fact 
that  there  is  no  uniformity  of  opinion  among  lumber  men 
or  accountants  with  regard  to  certain  essential  features  of 
the  business.  Reference  here  is  more  particularly  made  to 
such  questions  as  the  treatment  of  interest  and  taxes  on 
temporarily  unproductive  forest  areas,  the  price  at  which  a 

iii 


iy  PREFACE 

lumber  inventory  should  be  valued,  and  the  definition  of 
true  lumber  cost.  The  author  feels  that  some  of  the 
methods  suggested  in  the  body  of  the  book  are  matters  of 
opinion,  and  may  not  be  in  accordance  with  the  reader's 
views;  but  the  treatment  of  the  subject  necessitated  the 
adoption  of  a  definite  basis.  A  special  chapter  has,  however, 
been  devoted  to  these  debatable  points  in  lumber  account- 
ing, in  which  an  endeavor  has  been  made  to  discuss  the 
various  questions  from  all  sides.  The  principle  of  "cost" 
has  been  maintained  throughout,  irrespective  of  the  author's 
views  on*  the  subject,  as  being  more  in  accordance  with 
custom  and  accounting  practice  than  any  other. 

The  use  of  technical  terms  has  been  avoided  as  far  as 
possible,  and  those  which  appear  in  the  text  are  either 
immediately  explained  or  placed  in  the  glossary. 

The  author  desires  to  acknowledge  with  thanks  the 
assistance  received  from  Mr.  G.  I.  Hodges  in  the  prepara- 
tion of  this  work;  also  the  assistance  received  from  Mr. 
Charles  Neville  in  the  preparation  of  the  glossary  in  Chap- 
ter IX. 

ARTHUR  F.  JONES. 
Milwaukee,  Wisconsin, 

March  2nd,  1914. 


CONTENTS 


PART  I— LUMBER  MANUFACTURING  AND  ITS  RECORDS 
Chapter  I.     Fixed  Assets;  Timber  Bonds 

Standing  Timber 
Stumpage 

Life  of  Plant — Depreciation 
Classification  of  Timber 
Purchases  of  Timber 
Purchases  of  Real  Estate 
Cutover  Lands 
Value  of  Uncut  Lands 
Timber  Bonds 

Chapter  II.    General  Office 

Books  Required 
General  Ledger 
Journal 

Voucher  Journal 
Cash  Book 

Detailed  Construction  Ledger 
Detailed  Operating  Ledger 
Sales  Journal 
Freight  Journal 
Customers  Ledger 
Log  Ledger 
-Timber  Ledger 

Chapter  III.  Classification  of  Construction  and  Operating  Expenses 

Construction  Charges 
Operating  Charges 
Logging  Expenses 

(1)  Woods 

(2)  Transportation 


vi  CONTENTS 

Operating  Charges — (Continued) 
Pond  Expense 
Sawmill 
Yards 
Dry  Kilns 
Power 
Planing  Mill 
Lath  Mill 
Shingle  Mill 
Poles 

General  Operating  Expenses 
Distribution  Expenses — Shipping 
Selling 
General  Expenses 

Chapter  IV.    Logging  and  Sawmill  Costs 

Devising  a  Cost  System 

Form  of  Pay-Roll 

Pay-Roll  Check 

Company  Pay-Roll  Tokens 

Daily  Report  of  Logs  Cut  in  Woods 

Log  Summary 

Mark  Book 

Daily  Scale — Logs  Cut  by  Mill 

Report  of  Mill  Cut 

Daily  Record  of  Lumber  Cut 

Piling  Ticket 

Chapter  V.    Public  Utilities  and  Outside  Operations 

Railroads 

Power,  Light,  and  Water 

Land  Department 

Outside  Operations 

Boarding  House  and  Hospital 

Stable 

Commissary  and  Warehouse 

Chapter  VI.    Shipping  Department 
Orders 
Tally  Card 
Delivery  Card 
Piece  Tally  Sheet 
Daily  Loading  Record 
Car  and  Loading  Record 


CONTENTS  ^ 

Chapter  VII.    Monthly  and  Annual  Closing 

Method  of  Closing 
Inventories 

Calculating  Depreciation 
Form  of  Statement 

Chapter  VIII.    Debatable  Points  in  Lumber  Accounting 

Divergent  Views 

(1)  Disposition  of  Unearned  Increment 

(2)  Value  of  Uncut  Lands 

(3)  Interest  and  Taxes  on  Temporarily  Unproductive  Areas 

(4)  Pricing  the  Inventory 

(a)  Cost  Price 

(b)  Selling  Price  Less  Charges 

(c)  Fixed  Price 

(5)  Cost  and  True  Cost. 

Chapter  IX.    Technical  Terms  Used  in  the  Lumber  Business 


vili  CONTENTS 

PART  II— RECORDS  USED  IN  LUMBER  MANUFACTURING 

Chapter  X.    Forms 
Form 

la.  Voucher  Journal  (left) 

lb.  "              "        (right) 

2a.  Cash  Book  (left) 

2b.  "         "       (right) 

3.  Detailed  Construction  Ledger 

4.  Detailed  Operating  Ledger 
5a.  Sales  Journal  (left) 

5b.  "             "        (right) 

6.  Freight  Journal 

7.  Customers  Ledger 

8.  Log  Ledger 

9.  Timber  Ledger 
lOa.  Pay-Roll  (left) 
lOb.  "          (right) 

11.  Daily  Report  of  Logs  Cut  in  Woods 

12.  Log  Summary 

13.  Daily  Scale— Logs  Cut  by  Mill 

14.  Report  of  Mill  Cut 

15.  Daily  Record  of  Lumber  Cut 

16.  Piling  Ticket 

17.  Land  Ledger 

18.  Order  Form 

19.  Tally  Card 

20.  Dry  Shed  Tally  Card 

21.  Delivery  Card 

22.  Piece  Tally  Sheet 

23.  Daily  Loading  Record 

24.  Car  and  Loading  Record 

25  Monthly  Statement 

26  Detailed  Operating  Report 


LUMBER   MANUFACTURING 
ACCOUNTS 


LUMBER   MANUFACTURING 
ACCOUNTS 

Part  I — Lumber  Manufacturing  and 
Its  Records 


CHAPTER  I 

FIXED  ASSETS;   TIMBER  BONDS 

Standing  Timber 

The  standing  timber,  or  timber  rights,  are  the  principal 
assets  of  a  lumber  manufacturing  concern.  They  form  the 
security  for  its  bond  issue  (if  any),  and  upon  the  length 
of  the  cut  depends  the  life  of  the  plant;  for,  as  soon  as  the 
timber  resources  are  exhausted,  the  plant  and  machinery 
are,  in  the  majority  of  cases,  worth  only  salvage  value.  The 
estimated  quantity  of  the  timber  and  its  value  per  thousand 
feet  form  the  basis  for  one  of  the  principal  charges  to 
operations;  and  from  these  figures,  the  depreciation  on  the 
mill  as  a  whole  is  calculated. 

To  take  a  specific  instance,  let  it  be  assumed  that  the 
price  paid  for  certain  timber  or  timber  rights  is  $2,135,000, 

II 


12 


LUMBER    MANUFACTURING    ACCOUNTS 


and  that  the  cruise  on  which  the  price  is  based  shows  the 
following  results : 


Description  Quantity 

White  Pine 400,000,000 

Western  Pine 160,000,000 

Spruce  and  Cedar. .  110,000,000 
Fir,  Tamarack,  etc..  160,000,000 
Cedar  Poles  (70,000) 


Value  per 
1,000  ft. 

$3-50 

2.50 

2.OO 

•50 

.50  each 


Total 830,000,000 


Amount 

$1,400,000 

4OO,OOO 

220,000 

80,000 

35,000 

$2,135,000 


The  prices  paid  for  particular  tracts  naturally  vary; 
but  it  is  usually  impracticable,  from  a  bookkeeping  stand- 
point, to  segregate  the  products  of  different  areas,  and  the 
standing  timber  must  therefore  be  considered  as  a  whole. 

The  cedar  poles,  being  based  on  number  and  not  on 
measurement,  must  be  first  eliminated  and  set  up  in  a 
separate  account,  the  credits  to  that  account  being  the  value 
of  poles  cut  at  the  basic  price  of  fifty  cents  each.  A  similar 
amount  is  charged  to  operations  under  the  heading  of  Poles 
(Manufacturing)  account  when  the  poles  are  cut. 

Stumpage 

This  leaves  the  asset  of  "Standing  Timber"  at 
$2,100,000,  represented  by  830,000,000  board  feet  at  log 
scale,  or  an  average  price  of  $2.53  per  thousand  feet. 
Theoretically,  this  average  price  forms  the  basis  of  the  log- 
ging cost  in  respect  of  stumpage,  but  in  practice  it  is  usual 
to  add  to  this  figure  an  estimated  amount  per  thousand  feet 
as  a  matter  of  conservatism,  and  in  this  particular  instance 
the  officials  have  decided  that  $3  per  thousand  shall  be  the 
basis  for  the  charge  to  logging  cost  under  "Stumpage." 


FIXED    ASSETS;    TIMBER    BONDS  13 

As  a  rule,  it  is  quite  unnecessary  to  include  this  additional 
amount,  for  the  actual  yield  usually  overruns  the  cruise;  it 
is,  however,  a  custom  which  will  be  generally  approved  by 
accountants  as  being  safe  and  conservative. 

Life  of  Plant — Depreciation 

Assuming  that  the  capacity  of  the  mill  is  40,000,000 
feet  per  annum,  it  is  obvious  that,  at  a  rate  of  $3  per  1,000 
feet,  the  whole  of  the  book  value  of  the  timber  will  be 
eliminated  in  about  17^3  years,  whereas  the  timber  resources 
provide  for  continuous  capacity  operations  for  a  period  of 
approximately  20^4  years.  This  figure  constitutes  the  life 
of  the  plant,  and  is  arrived  at  by  dividing  the  annual  output 
into  the  total  available  board  feet. 

The  period  of  20^  years  forms  the  basis  for  deprecia- 
tion, if  the  sawmill  runs  at  capacity  output  for  the  entire 
period,  as  the  whole  of  the  value  of  the  plant  and  equipment 
must  be  written  off  during  that  time,  its  salvage  value  being 
ignored.  For  the  purpose  of  equalizing  depreciation  charges, 
however,  the  annual  charge  is  usually  based  on  the  monthly 
or  annual  mill  cut,  instead  of  on  the  life  of  the  plant,  as  it 
would  be  manifestly  unfair  to  charge  the  same  amount  to 
operation  when  the  mill  is  running  at  capacity  as  when  it 
is  not.  In  this  particular  instance,  assuming  the  mill  and 
equipment  cost  $830,000,  the  charge  to  operations  in  respect 
of  depreciation  would  be  $i  per  thousand  feet  at  log  scale. 
Special  depreciation  is  necessary  in  regard  to  certain  items, 
but  these  are  not  sufficiently  important  to  call  for  discussion 
here. 

In  considering  the  question  of  depreciation,  it  must  be 
borne  in  mind  that  the  charge  need  not,  of  necessity,  be 
based  on  the  timber  actually  owned,  but  on  the  available 
supply.  That  is  to  say,  if  there  is  additional  timber  which 
can  be  purchased,  this  factor  can  be  taken  into  consideration 


I4  LUMBER    MANUFACTURING    ACCOUNTS 

in  arriving  at  the  annual  charge.  If  the  depreciation  charge, 
however,  is  based  on  the  available  supply,  the  facts  of  the 
case  must  warrant  this  method  of  treatment.  The  supply 
should  be  available  for  the  use  of  that  particular  mill  only, 
and  there  must  be  a  very  reasonable  assumption  that  these 
timber  resources  will  eventually  be  purchased.  As  a  general 
rule,  this  method  of  computing  depreciation  charges  is  un- 
desirable, but  instances  arise  in  practice  where  the  factor  of 
the  available  supply  may  be  legitimately  taken  into  considera- 
tion. For  the  sake  of  simplicity,  it  is  assumed,  in  the 
example  dealt  with,  that  the  whole  of  the  available  supply 
is  owned. 

Classification  of  Timber 

It  is  often  desirable  to  segregate  the  various  classes  of 
timber.  When  this  is  done  the  general  accounting  procedure 
is  the  same,  but,  instead  of  carrying  one  asset  entitled 
"Lands  and  Timber,"  having  a  book  value  of  $2,100,000, 
separate  accounts  will  be  carried  as  follows: 

White  Pine $1,400,000 

Western  Pine 400,000 

Spruce  and  Cedar 220,000 

Fir,  Tamarack,  etc ....  80,000 


Total $2,100,000 


The  basic  prices  for  the  stumpage  cost  will  be  White 
Pine,  $3.50;  Western  Pine,  $2.50;  Spruce  and  Cedar,  $2; 
Fir,  Tamarack,  etc.,  50  cents — with  the  addition  of  such 
amount  per  thousand  feet  as  the  management  may  consider 
to  be  necessary  or  desirable.  In  operation,  the  only  differ- 
ence under  a  classification  of  timber  is  that  the  various  logs 
must  be  scaled  into  the  sawmill  in  classes  instead  of  as  a 
whole,  and  that  the  product  must  be  similarly  segregated. 


FIXED   ASSETS;    TIMBER    BONDS  ^ 

Purchases  of  Timber 

Subsequent  purchases  of  timber  and  the  addition  of 
interest,  taxes,  and  similar  items,  affect  the  logging  cost  and 
the  life  of  the  plant;  but  the  basic  principles  are  the  same 
as  when  the  original  cost  alone  is  dealt  with,  and  the  results 
are  arrived  at  in  the  same  manner.  If  additional  purchases 
are  made  at  enhanced  figures,  the  cost  of  the  stumpage  per 
thousand  feet  naturally  increases  in  proportion,  and  care 
must  be  taken  to  ascertain  that  the  price  at  which  the 
stumpage  is  included  in  the  logging  cost  is  never  less  per 
thousand  feet  than  the  result  obtained  by  dividing  the 
footage  remaining  uncut,  into  the  book  value. 

Purchases  made  for  immediate  logging  should  be 
charged  to  Logging  account  at  the  price  per  thousand  feet 
actually  paid,  and  not  at  the  average  price  of  the  total  hold- 
ings. The  reason  for  this  course  is  obvious,  as  a  white  pine 
area  might  be  purchased  at  $5  per  thousand  feet  and  im- 
mediately logged,  whereas  the  average  price  of  the  total 
holdings  had  been  agreed  upon  as  $3  per  thousand.  Under 
such  circumstances,  if  the  $3  rate  were  adhered  to,  there 
would  be  an  undercharge  to  logging  cost  of  $2  per  thousand 
feet.  Where,  however,  no  segregation  is  made  into  classes 
of  timber,  and  where  subsequent  purchases  are  not  im- 
mediately logged  off,  the  "average"  rule  must  necessarily 
be  applied. 

Purchases  of  Real  Estate 

In  addition  to  the  timber  lands,  purchases  of  real  estate 
are  occasionally  made  for  mill  and  town  sites.  The  method 
of  entering  these  upon  the  books  differs  in  no  way  from 
ordinary  commercial  practice.  A  special  department  usually 
handles  the  townsite  proposition.  The  operation  of  this  de- 
partment and  the  effect  of  its  transactions  on  the  general 
books  of  the  company  are  dealt  with  in  Chapter  V. 


i6 

Cutover  Lands 

The  land  underlying  the  timber  is  not  usually  considered 
as  being  of  any  actual  value  from  an  operating  standpoint, 
and  the  purchase  price  is  based  on  the  value  of  the  standing 
timber  alone,  the  land  values  being  ignored.  Should  any 
value,  however,  be  placed  upon  the  uncut  lands  at  the  time 
of  purchase,  the  value  of  the  timber  itself  must  be  reduced, 
and  the  charge  to  logging  operations  be  consequently  less. 
A  special  account,  "Uncut  Lands,"  will  be  opened,  and 
transfers  made  from  this  account  to  "Cutover  Lands"  at  the 
original  acre  price  as  the  areas  are  logged  off.  The  Uncut 
Lands  account  will  thus  be  automatically  wiped  out  when 
logging  operations  come  to  an  end;  and  the  profit  or  loss 
from  the  sales  of  real  estate  will  be  shown  in  the  Cutover 
Lands  account,  such  profit  being  transferred  to  Surplus 
account  from  time  to  time. 

Usually  the  entire  profit  on  each  sale  of  cutover  lands  is 
transferred  to  Surplus  account,  but  a  risk  is  involved  in  this 
course  which  must  not  be  lost  sight  of.  Take,  for  instance, 
a  case  where  the  uncut  lands  have  been  valued  at  $20  per 
acre — a  figure  which  presumably  is  under  the  average  price 
at  which  the  lands  will  be  sold.  The  best  lands  will  naturally 
be  sold  first,  and  may  realize  $100  per  acre,  or  a  profit  of 
$80  which  is  transferred  to  Surplus.  This  process  is  con- 
tinued with  diminishing  prices  until  eventually  the  remaining 
lands  are  practically  unsalable,  being  perhaps  situated  on  the 
tops  of  mountains  or  very  remote  from  transportation.  This 
real  estate  has  no  realizable  value,  but  it  still  stands  on  the 
books  at  $20  per  acre — a  manifest  overvaluation.  No  definite 
rule,  however,  can  be  laid  down  as  to  the  amount  which 
may  properly  constitute  divisible  profit  in  such  cases,  as  the 
method  of  treatment  will  vary  in  accordance  with  the  partic- 
ular circumstances.  Transactions  in  the  sale  of  cutover 
lands  are  handled  in  the  land  department. 


FIXED    ASSETS;   TIMBER    BONDS  17 

Value  of  Uncut  Lands 

Although  the  value  of  uncut  lands  is  generally  ignored 
in  arriving  at  the  purchase  price  and  for  the  purpose  of  a 
bond  issue,  the  actual  value  of  such  lands  is  often  consider- 
able. This  value  depends  on  location,  climate,  proximity  to 
transportation  facilities,  etc.  Usually  the  question  of  the 
value  of  lands  not  cut  over  comes  up  sooner  or  later, 
especially  when  the  lumber  market  is  unfavorable  and  profits 
small  or  non-existent,  and  when  the  land  is  actually  selling 
at  good  prices  for  agricultural  purposes.  Under  such  cir- 
cumstances, the  uncut  land  is  a  convenient  method  of  build- 
ing up  a  surplus,  but  it  cannot  be  maintained  that  such  a 
surplus  is  available  for  distribution. 

Timber  Bonds 

Most  timber  propositions  are  bonded ;  and  timber  bonds 
are  becoming  more  and  more  popular  with  the  investing 
public.  They  will  undoubtedly  be  still  more  eagerly  taken 
up  when  the  popular  misconception  regarding  fire  risk  is 
removed.  Timber  nowadays  is  carefully  guarded;  and  the 
fire  risk,  except  in  certain  localities,  is  not  so  great  as  the 
danger  arising  from  natural  causes,  such  as  storms,  insects, 
fungi,  etc. 

Timber  bonds  are  usually  serial  in  character,  as  in  this 
form  they  are  attractive  to  banks  and  insurance  companies, 
and  to  others  who  desire  to  invest  funds  for  specific  periods, 
as  they  can  purchase  such  serials  as  will  mature  at  the  re- 
quired dates.  The  retirement  of  the  bonds  at  the  specified 
dates  is  provided  for  by  means  of  a  sinking  fund  based  on 
the  conditions  of  the  mortgage. 

Two  methods  are  in  common  use,  the  first  providing 
that,  before  cutting  timber  from  a  specified  tract,  the 
operator  shall  pay  to  the  sinking  fund  the  actual  value  of  the 
timber  thereon  contained  as  recited  in  the  schedule  termed 


l8  LUMBER    MANUFACTURING    ACCOUNTS 

the  "releasing  list"  attached  to  the  mortgage.  The  second 
is  based  on  so  much  per  thousand  feet  on  the  logs  cut  (log 
scale)  or  on  the  board  measure  produced  (lumber  scale). 
Both  methods  call  for  a  minimum  amount  to  be  deposited 
sufficient  to  retire  the  maturing  bonds,  and  one  method  is 
probably  as  good  as  the  other.  The  second,  however,  is 
preferable,  inasmuch  as  it  is  not  so  likely  as  the  first  to 
hamper  the  operator  financially.  In  the  first  case  the  operator 
must  provide  the  money  before  cutting  and,  in  the  second, 
after  he  has  done  so,  the  payments  under  the  second  method 
being  made  in  the  month  or  quarter  following  the  cutting. 
The  amount  payable  is  based  on  the  capacity  of  the  plant, 
the  life  of  the  loan,  and  the  amount  of  the  maturities. 

Surplus  payments  to  the  sinking  fund  can  be  used  for 
purchasing  future  serials  in  the  open  market  or  otherwise, 
or  the  deed  may  provide  that  bonds  from  other  serials  may 
be  purchased  at  a  fixed  premium  at  the  option  of  the  trustees. 
In  the  early  days  of  timber  bond  issues,  the  basis  for  sink- 
ing fund  provision  was  often  fixed  at  too  high  a  figure,  and 
the  operator  was  hampered  financially  in  consequence.  This 
possibility  should  be  seriously  considered  in  connection  with 
an  issue  of  bonds.  Sinking  fund  provisions  should  not  be 
based  on  inflated  or  exceptional  prices,  but  preferably  on 
prices  lower  than  the  average.  It  will  be  found  in  practice 
that  anticipated  profits  outlined  in  a  prospectus  are  often 
unrealized,  not  only  because  the  average  price  is  over- 
estimated, but  also  because  the  cost  of  manufacture  is  far 
too  often  underestimated.  As  sinking  funds  are  considered 
primarily  in  connection  with  profits,  this  point  becomes  very 
material  in  calculating  the  amount  of  sinking  fund  contribu- 
tions. 


CHAPTER   II 

GENERAL   OFFICE 

Books  Required 

All  the  material  information  of  a  lumber  business,  both 
accounting  and  statistical,  eventually  finds  its  way  into  the 
general  office  and  is  incorporated  in  its  records.  Its  source 
and  the  method  of  preparing  the  subsidiary  records,  can 
more  conveniently  be  considered  under  the  headings  of 
operating  divisions,  such  as  "Logging,"  "Sawmill,"  "Ship- 
ping," etc.  The  books  necessary  for  recording  the  financial 
transactions  are: 

General  Ledger 

Journal 

Voucher  Journal 

Cash  Book 

Detailed  Construction  Ledger 

Detailed  Operating  Ledger 

Sales  Journal 

Freight  Journal 

Customers  Ledgers 

Log  Ledger 

Timber  Ledger 

General  Ledger 

No  special  form  is  required  for  this,  but  a  column  for 
feet  and  pieces  is  practically  a  necessity.  Such  accounts 
should  be  opened  as  are  necessary  to  record  correctly  the 

19 


20  LUMBER    MANUFACTURING    ACCOUNTS 

transactions  regarding  the  particular  company.  Care  should 
be  taken  to  open  controlling  accounts  sufficient  to  provide  for 
simplicity  of  check.  If  an  adequate  number  of  accounts  are 
opened,  the  control  is  more  effective,  and  errors  between 
the  controlling  and  detailed  accounts  are  necessarily  less 
difficult  to  locate. 

Journal 

A  book  with  the  usual  journal  rulings  is  sufficient  in 
most  cases,  but  one  in  columnar  form  may  in  some  instances 
be  desirable.  It  is  usually  unnecessary,  however,  as  transfer 
and  other  journal  vouchers  can  be  put  through  the  voucher 
journal  if  desired. 

Voucher  Journal 

A  special  form  of  voucher  journal  is  necessary.  Form  i 
will  be  found  suitable  for  most  lumber  manufacturing  con- 
cerns. The  headings  of  the  various  columns  will  naturally 
vary  with  the  number  of  controlling  accounts  required. 

This  form  can  be  used  for  both  cash  and  journal  vouch- 
ers. The  vouchers  themselves  should,  preferably,  be  of  the 
"check"  voucher  pattern,  and  contain  sufficient  space  for 
adequate  distribution.  They  should,  of  course,  be  numbered 
consecutively;  and  it  will  be  found  convenient  to  give  each 
month  a  number  corresponding  to  its  sequence  in  the 
calendar;  thus,  the  first  voucher  in  January  will  be  1001 ; 
the  first  in  February,  2001 ;  and  the  first  in  December,  12001. 
If  this  system  be  adopted,  the  location  of  any  particular 
voucher  may  be  instantly  ascertained.  The  journal  vouchers 
should  preferably  be  of  a  different  color  from  the  cash 
vouchers  and  should  be  separately  filed. 

One  point  involved  in  check  vouchers  is  probably  not 
very  widely  known,  but  may  become  of  considerable  impor- 
tance. Most  vouchers  contain  on  the  back  of  the  check  the 


GENERAL    OFFICE  21 

following  words,  or  some  phrase  of  similar  import:  "The 
indorsement  of  this  check  by  payee  is  an  acceptance  of  it  in 
full  settlement  of  the  account  as  stated  in  voucher  bearing 
corresponding  number,"  and  on  the  face  of  the  voucher, 
"Detach  this  statement  before  presenting  check."  A  case  has 
arisen — though  not  actually  relating  to  vouchers — in  which 
the  defendant  claimed  that  he  did  not  receive  the  documents 
called  for  in  a  similar  notice,  and  the  plaintiff  was  unable  to 
prove  the  facts.  Under  these  circumstances,  it  is  better  to 
insert  on  the  check  itself  the  words,  "Detach  the  above 
voucher  before  presenting  this  check,"  as  this  is  notice  that 
a  statement  should  have  been  received  and  also  prima  facie 
evidence  that  such  statement  was  actually  received. 

A  voucher  record  has  certain  objections  which  are  well 
known  to  accountants.  Perhaps  the  most  important  is  the 
possibility  of  a  duplicate  payment.  If  it  is  desired  to  install 
instead  a  regular  purchase  journal  and  ledger,  the  former 
book  will  conform  very  closely  to  the  voucher  journal  form, 
with  the  elimination  of  such  columns  as  do  not  relate  to 
purchases. 

Cash  Book 

A  special  form  of  cash  book  is  usually  necessary,  but 
the  particular  form  will  naturally  vary  in  accordance  with 
the  requirements  of  the  business  and  the  number  of  controll- 
ing accounts  required.  Form  2  incorporates  the  usual 
rulings. 

A  bound  book  should  be  used  for  recording  the  cash 
transactions.  All  moneys  received  should  be  deposited  daily, 
and  all  payments  should  be  made  by  check,  including  those 
for  petty  cash  requirements.  The  petty  cash  fund  should 
be  started  with  a  sufficient  sum  to  carry,  say,  a  week's  ex- 
penditures, the  total  of  which  should  be  reimbursed  by 
check,  thus  restoring  the  fund  to  its  original  amount. 


22  LUMBER    MANUFACTURING    ACCOUNTS 

Detailed  Construction  Ledger 

Form  3  will  be  found  convenient  for  recording  details 
of  the  construction  accounts,  a  list  of  which  is  given  in 
Chapter  III. 

Detailed  Operating  Ledger 

Details  of  the  operations  are  entered  up  from  the  vouch- 
ers and  from  other  sources.  Form  4  will  be  found  suitable 
for  the  purpose.  A  list  of  the  usual  operating  accounts  is 
given  in  Chapter  III. 

Sales  Journal 

The  form  of  sales  journal  will  naturally  vary  with  the 
requirements  of  each  individual  mill,  but  Form  5  can  be 
adapted  to  circumstances. 

The  book  may  be  of  loose-leaf  form,  the  left-hand  side 
containing  the  sale  and  freight  details,  and  the  right-hand 
side  the  distribution  of  the  sale.  If  it  is  desired  to  segregate 
the  product  still  further  into  classes  of  lumber,  it  is  merely 
a  question  of  inserting  additional  columns. 

The  totals  of  Accounts  Receivable  and  Cash  Sales  will 
be  posted  to  the  debit  of  the  respective  accounts,  the  general 
ledger  items  being,  of  course,  posted  individually. 

The  totals  of  the  Estimated  Freight  column  will  be  posted 
to  the  credit  of  the  Estimated  Freight  account,  and  the 
individual  items  to  the  credit  column  of  the  estimated  freight 
division  of  the  Customers  Ledger  account.  The  amount  of 
estimated  freight  is  entered  in  the  Estimated  Freight  column 
in  the  Customers  Ledger  account  for  the  purpose  of  showing 
the  actual  value  of  the  customer's  accounts  exclusive  of 
freight.  When  the  actual  freight  bill  comes  to  hand,  the 
corresponding  estimated  items  of  the  Customers  Ledger  ac- 
count are  checked  off;  the  total  of  the  unchecked  items  will 
then  agree  with  the  balance  shown  on  the  Estimated  Freight 


GENERAL    OFFICE  23 

account.  All  freight  items  are  adjusted  through  the  freight 
journal,  for  which  a  form  is  given  later. 

The  totals  of  the  various  distribution  columns,  viz., 
Estimated  Freight,  Lumber,  etc.,  will  be  posted  to  the  credit 
of  their  respective  accounts  in  the  general  ledger ;  and  items 
appearing  in  the  "Merchandise  and  Sundries"  column  will 
be  specified  in  detail  and  posted  individually  or  from  a 
monthly  dissection  of  the  items  appearing  therein. 

For  convenience  in  arriving  at  the  amount  of  commission 
payable  to  salesmen,  a  column  has  been  inserted  giving  the 
necessary  particulars. 

Freight  Journal 

Lumber  is  usually  sold  f.  o.  b.  at  destination;  and  each 
item,  accordingly,  contains  a  proportion  of  freight,  which 
must  be  estimated  at  the  time  of  shipment,  and  adjusted 
when  the  actual  freight  bill  comes  to  hand.  The  freight 
journal  shown  in  Form  6  will  be  found  convenient. 

The  amount  of  the  actual  freight  is  entered  in  the  freight 
journal  and  posted  to  the  credit  of  the  individual  accounts. 
Opposite  this  amount  is  entered  the  original  amount  of  the 
estimated  freight  as  it  appears  in  the  sales  journal.  This 
estimated  amount  is  posted  to  the  debit  of  the  Estimated 
Freight  column  in  the  customer's  account,  and  the  monthly 
total  is  debited  to  Estimated  Freight  account.  The  debit 
or  credit  adjustment  plus  the  total  of  the  Estimated  Freight 
column  will,  of  course,  equal  the  total  credited  to  customers. 
These  adjustments  could  be  segregated,  but,  as  so  many 
mixed  cars  are  sold  and  as  the  amount  involved  is  usually 
small,  it  is  a  common  practice  to  either  credit  or  debit  the 
difference  to  Lumber  Sales.  As  already  stated,  each  item 
of  estimated  freight  is  adjusted  when  the  actual  freight  bill 
comes  to  hand.  When  this  information  is  received,  the  com- 
pany is  in  a  position  to  make  a  claim  against  the  railroad 


24  LUMBER    MANUFACTURING    ACCOUNTS 

company  for  differences.  The  form  submitted  is  designed 
to  show  the  ultimate  disposition  of  every  item  of  estimated 
freight. 

Customers  Ledger 

A  convenient  ruling  for  a  customers  ledger  is  shown  in 
Form  7. 

The  columns  on  the  extreme  right  are  for  recording 
estimated  freight.  At  the  time  the  sale  is  entered,  the  esti- 
mated freight  is  inserted  in  the  credit  column  from  the  sales 
journal,  which  is  relieved  by  an  entry  of  the  same  amount 
to  the  debit  column  from  the  freight  journal,  at  the  time  the 
actual  freight  is  posted.  The  reason  for  the  insertion  of 
these  columns  is  to  enable  the  trial  balance  to  be  taken  in 
two  columns,  and  also  that  the  actual  value  of  Accounts 
Receivable  may  be  readily  ascertained.  The  total  of  the 
balances  of  the  Estimated  Freight  columns  will  agree  with 
the  balance  of  the  Estimated  Freight  account. 

Log  Ledger 

If  it  is  necessary  to  record  transactions  in  logs  pur- 
chased, Form  8  can  be  used. 

Details  of  the  purchase  are  entered  therein,  together  with 
all  credits  for  cash  or  supplies.  The  statistical  details  are 
inserted  from  the  scale  reports. 

Timber  Ledger 

The  timber  ledger  is  purely  for  statistical  purposes,  in 
order  to  show  the  extent  and  location  of  the  logging  opera- 
tions. The  timber  ledger  shown  in  Form  9  will  be  found  to 
answer  the  purpose. 

The  form  presented  contains  in  the  left-hand  corner  a 
plat  of  each  section,  which  is  divided  up  into  tracts  of  forty 


.GENERAL    OFFICE  25 

acres  each.  These  tracts  can  be  shaded  to  represent  the 
various  classes  of  timber  standing  thereon,  or  details  of  the 
actual  cruise  can  be  entered  if  desired. 

The  estimate  for  each  forty  acres  is  entered  under  the 
various  locations  according  to  the  classes  of  timber.  Only 
three  columns  for  the  estimate  and  cut  are  provided  in  the 
form  of  timber  ledger  shown,  but  these  can  be  increased  as 
desired.  The  details  of  the  actual  cut  are  entered  from  the 
scale  reports  received  from  the  woods. 


CHAPTER   III 

CLASSIFICATION  OF  CONSTRUCTION  AND 
OPERATING    EXPENSES 

Construction  Charges 

The  method  of  treating  construction  charges  for  a  saw- 
mill does  not  differ  from  ordinary  commercial  practice, 
except  possibly  that  the  segregation  is  carried  a  little  fuller 
than  is  usually  the  case,  it  being  desirable,  from  the  stand- 
point of  insurance  and  for  other  reasons,  to  know  the  exact 
cost  of  each  unit. 

Only  the  account  of  "Construction  and  Equipment" 
need  be  carried  in  the  general  ledger,  the  particulars  making 
up  the  total  of  this  account  being  shown  in  a  detailed  con- 
struction ledger  in  which  the  accounts  may  be  segregated 
in  any  way  desired.  The  following  list. contains  a  suggested 
distribution  of  the  construction  charges : 

Clearing  Mill  Site 
Sawmill  and  Equipment 
Planing  Mill  and  Equipment 
Lath  Mill  and  Equipment 
Dry  Kilns 
Power  House 
Shavings  Vault 
Sorting  Shed 
Dry  Sheds 

26 


CONSTRUCTION    AND    OPERATING    EXPENSES    27 

Burner  and  Conveyor 

Water  System  Plant 

Waterworks 

Electric  Light  Plant 

Electric  Lighting — Distribution  System 

Fire  Protection  System 

Yard 

Yard  Equipment 

Warehouse 

Oil  House 

Lime  House 

Machine  and  Blacksmiths'  Shops 

Mill  Pond 

Dam 

Boom 

Launches  and  Boats 

Log  Slip 

Logging  Railroad 

Locomotives 

Logging  Equipment  and  Slides 

Barn 

Office 

Club 

Official  Residences 

Boarding  House 

Boarding  House  Equipment 

Cottages 

Commissary 

Camp  Construction 

Camp  Equipment 

Office  Furniture  and  Equipment 

Tools  and  Appliances 

Horses,  Mules,  Oxen,  Wagons 

Miscellaneous 


2g  LUMBER    MANUFACTURING    ACCOUNTS 

If  other  operations,  such  as  a  sash  and  door  factory, 
bending  works,  or  similar  activities  are  carried  on,  separate 
construction  accounts  will  be  opened  for  these. 

The  accounts  in  the  construction  ledger  will,  of  course, 
contain  details  showing  the  individual  amounts  expended 
in  respect  of  machinery,  labor,  lumber,  and  materials  gen- 
erally, compiled  from  the  vouchers,  pay-rolls,  and  transfer 
vouchers. 


Operating  Charges 

A  complete  enumeration  of  operating  accounts  to  coin- 
cide writh  the  requirements  of  every  business  is  practically 
impossible;  the  following  list,  however,  will  give  a  general 
indication  of  the  lines  to  be  followed : 

LOGGING  EXPENSES — (i)  WOODS  Account 

Number 

Superintendence i 

(a)  Salaries 

(b)  Expenses 

Foremen  and  Clerks ,.  .> 2 

(a)  Salaries 

(b)  Expenses 

Sealers   3 

(a)  Salaries 

(b)  Expenses 

Sawing 4 

(a)  Contract  Labor 

(b)  Company  Labor 

Supplies    5 

Maintenance  of  Camp  Buildings 6 

(a)  Labor 

(b)  Material 


CONSTRUCTION    AND    OPERATING    EXPENSES 


29 


Account 
Number 

Maintenance  of  Spur  Tracks •         7 

(a)  Labor 

(b)  Material 

Maintenance  of  Equipment. . . ., 8 

(a)  Labor 

(b)  Material 

Road    Building. . , 9 

Fire  Patrol  and  Protection 10 

General  Expense 1 1 

Depreciation 12 

LOGGING  EXPENSES — (2)  TRANSPORTATION  Account 

Number 

Railroad 13 

Rafting 14 

Teams 15 

(a)  Teamsters 

(b)  Feed  and  Stable  Help 

(c)  Repairs  and  Blacksmithing 

Charge  to  these  accounts  all  costs  of  logging,  from  prep- 
aration of  woods  and  roads,  flumes,  etc.,  for  operation,  to 
delivery  of  logs  to  pond.  For  inventory  purposes,  distinc- 
tion should  be  observed  between  "Woods"  cost  and  "Trans- 
portation" cost. 

POND  EXPENSE  Account 

Number 

Labor 30 

Supplies 31 

Maintenance  of  Dams 32 

(a)  Labor 

(b)  Material 


-jo  LUMBER    MANUFACTURING    ACCOUNTS 

Account 
Number 

Maintenance  of  Equipment 33 

(a)  Labor 

(b)  Material 

General  Expenses 34 

Depreciation 35 


Charge  to  these  accounts  all  costs  in  connection  with 
handling  logs  in  the  pond  and  delivering  same  to  mill,  and 
for  maintenance  of  storage  facilities,  booms,  dams,  and 
pond  equipment. 


SAWMILL  Account 

Number 

Power 50 

Foremen  and  Assistants 51 

General  Labor 52 

Supplies 53 

Maintenance  of  Buildings 54 

(a)  Labor 

(b)  Material 

Maintenance  of  Machinery  and  Equipment. .  55 

(a)  Labor 

(b)  Material 

Insurance ,. 56 

General  Expenses 57 

Depreciation .. ., 58 


Charge  to  these  accounts  all  costs  from  scaling  the  logs 
at  the  head  of  the  mill  to  the  delivery  of  the  finished  product 
to  the  sorting  sheds. 


YARDS  Number 

Account 

Foremen  and  Assistants 80 

Labor — Sorting  from  Chain 81 

Transportation  to  Piles 82 

"         Piling 83 

Shed  Grading 84 

General 85 

Teaming 86 

Maintenance  of  Yards  and  Sheds 87 

(a)  Labor 

(b)  Material 

Maintenance  of  Equipment 88 

(a)  Labor 

(b)  Material 

Supplies 89 

Fire  Protection 90 

Insurance 91 

General  Expenses 92 

Depreciation 93 

Charge  to  these  accounts  all  yard  costs  from  receipt  of 
lumber  at  the  sorting  chain  to  delivery  to  piles,  kilns,  dry 
sheds,  or  planing  mill. 

DRY  KILNS  Account 

Number 

Power no 

Labor ,. .. in 

Maintenance  of  Buildings 112 

(a)  Labor 

(b)  Material 

Maintenance  of  Equipment 113 

(a)  Labor 

(b)  Material 


32  LUMBER    MANUFACTURING    ACCOUNTS 

Account 
Number 

Supplies 114 

Insurance 115 

General  Expenses 116 

Depreciation 117 

Charge  to  these  accounts  all  costs  of  operating  dry  kilns. 

POWER  Account 

Number 

Engineers  and  Firemen 130 

Oil  and  Waste 131 

Supplies   132 

Maintenance  of  Buildings 133 

(a)  Labor 

(b)  Material 

Maintenance  of  Machinery  and  Equipment. .      134 

(a)  Labor 

(b)  Material 

Insurance 135 

General  Expenses 136 

Depreciation   137 

Charge  to  these  accounts  all  cost  of  power,  including 
handling  of  fuel  used.  The  cost  of  power  should  be  dis- 
tributed over  the  various  operating  divisions  on  a  metered 
or  equitable  basis  where  possible. 

PLANING  MILL  Account 

Number 

Power 150 

Foreman 151 

General  Labor 152 

Supplies  153 


CONSTRUCTION    AND    OPERATING    EXPENSES 


33 


Account 
Number 

Maintenance  of  Buildings. ... .,. ...... 154 

(a)  Labor 

(b)  Material 

Maintenance  of  Machinery  and  Equipment. .      155 

(a)  Labor 

(b)  Material 

Insurance 156 

General  Expenses 157 

Depreciation 158 

Charge  to  these  accounts  all  costs  of  dressing  lumber, 
from  the  time  it  is  received  at  the  planing  mill  until  it  is  de- 
livered for  transfer  to  the  dry  sheds  or  shipping  platforms. 

LATH  MILL  Account 

Number 

Power 170 

Contract  Labor 171 

Company  Labor 172 

vSupplies  173 

Maintenance  of  Buildings 174 

(a)  Labor 

(b)  Material 

Maintenance  of  Equipment 175 

(a)   Labor 

(.b)   Material 

Insurance , 176 

General  Expenses 177 

Depreciation 178 

Charge  to  these  accounts  all  costs  in  connection  with  the 
manufacture  of  lath.  It  is  impracticable  and  misleading  to 
attempt  to  charge  operations  of  the  lath  mill  with  any 


34 


LUMBER    MANUFACTURING    ACCOUNTS 


amount  purporting  to  represent  the  value  of  the  product; 
received  from  the  sawmill,  as  waste  material  is  largely  used. 
Laths  may  be  considered  as  a  by-product  pure  and  simple. 

Account 

SHINGLE  MILL  Number 

Logs 190 

Contract  Labor 191 

Company  Labor 192 

Supplies   193 

Maintenance  of  Buildings 194 

(a)  Labor 

(b)  Material 

Maintenance  of  Equipment 195 

(a)  Labor 

(b)  Material 

Insurance 196 

General  Expenses 197 

Depreciation  198 

Charge  to  these  accounts  all  expenses  in  connection  with 
the  manufacture  of  shingles.  In  a  number  of  cases  it  is 
impracticable  to  charge  the  logs  or  bolts  used  to  the  shingle 
mill ;  and  the  shingles  may  be  more  conveniently  considered 
as  a  by-product. 

Account 
POLES  Number 

Sawing — Contract  Labor 210 

Sawing — Company  Labor 211 

Hauling   212 

Scaling 213 

Delivery  to  Cars 214 

General  Expenses 215 

Charge  to  these  accounts  all  costs  in  connection  with 
cutting  and  delivering  poles.  The  pole  business  is  usually 


CONSTRUCTION    AND    OPERATING    EXPENSES    35 

a  separate  undertaking ;  and  poles  are  generally  sold  as  they 
stand  in  the  woods,  all  expense  being  borne  by  the  purchaser. 

GENERAL  OPERATING  EXPENSES  Account 

Number 

Paymaster   230 

Timekeepers 231 

Watchmen   232 

Maintenance  of  Fire  Apparatus 233 

(a)  Labor 

(b)  Material 

Stable  Expenses 234 

(a)  Barn  Boss  and  Helpers 

(b)  Feed 

(c)  Repairs 

(d)  Miscellaneous 

Taxes 235 

Insurance — Lumber  and  Miscellaneous 236 

Injuries  and  Damages 237 

Miscellaneous   238 

Charge  to  these  accounts  all  costs  which  are  not  immedi- 
ately distributable  to  the  various  operating  departments. 

DISTRIBUTION  EXPENSES — SHIPPING  Account 

Number 

Salaries — Shipping  Clerk  and  Assistants. . . .  250 

Labor — Trucking  to  Platform 251 

Labor — Loading  to  Cars 252 

Supplies   253 

Car  Stakes 254 

(a)  Labor 

(b)  Material 

Demurrage   255 

Miscellaneous 256 


36  LUMBER    MANUFACTURING    ACCOUNTS 

Charge  to  these  accounts  costs  of  delivering  stock  sold 
from  piles,  dry  sheds,  and  planing  mill  to  cars  preparatory 
to  shipment. 

Account 
SELLING  Number 

Salesmen    ; 260 

(a)  Salaries 

(b)  Expenses 

Advertising   261 

Commissions   262 

Collections 263 

Miscellaneous 264 

Charge  to  these  accounts  all  costs  in  connection  with  the 
marketing  of  the  product. 

Account 

GENERAL  EXPENSES  Number 

Salaries  of  Officers 280 

Expenses  of  Officers 281 

Salaries  of  Clerks ^ 282 

Expenses  of  Clerks 283 

Stationery  and  Printing 284 

Office  Supplies 285 

Telephone 286 

Postage  and  Telegrams 287 

Taxes  and  Licenses 288 

Insurance 289 

Legal   Expenses 290 

Depreciation  of  General  Office  Building  and 

Equipment 291 

Miscellaneous 292 

Charge  to  these  accounts  all  expenses  pertaining  to  the 
general  administration  of  the  affairs  of  the  company. 


CHAPTER   IV 

LOGGING  AND   SAWMILL  COSTS 

Devising  a  Cost  System 

The  accountant  called  upon  to  devise  forms  for  logging 
and  sawmill  costs  and  statistics,  must  bear  in  mind  that  the 
requirements  for  different  mills  vary,  and  also  that  every 
lumberman  has  his  own — generally  very  definite — ideas  on 
the  subject.  The  accountant  must  carefully  study  the  needs 
of  each  individual  mill,  and  adapt  himself  to  conditions.  To 
devise  a  single  system  which  will  adequately  take  care  of 
the  costs  in  every  mill  is  an  impossibility;  and  the  forms 
shown  in  Part  II  (n — 16)  are  merely  of  a  general  char- 
acter, indicating  the  lines  to  be  followed.  The  accountant 
is  usually  left  a  comparatively  free  hand  with  regard  to  the 
form  of  the  general  books;  but  with  regard  to  the  special 
forms  for  operating  divisions  he  must  be  largely  guided  by 
the  requirements  of  the  management,  the  needs  of  the  par- 
ticular mill,  and  the  methods  of  operation.  Forms  to  take 
care  of  any  particular  phase  of  the  operations  are  usually  not 
difficult  to  devise.  The  main  thing  to  avoid  is  that  over- 
elaboration  which  is,  unfortunately,  rather  characteristic 
of  some  accountants. 

If  certain  information  is  desired  by  the  management, 
ascertain  first  of  all  whether  this  information  is  material. 
If,  after  discussion,  it  is  found  to  be  of  importance,  devise 
the  simplest  form  which  will  serve  the  purpose.  Remember 
that  each  form  added  means  additional  expense;  and  do 
not  devise  forms  which  require  the  services  of  an  expert 

37 


38  LUMBER    MANUFACTURING    ACCOUNTS 

bookkeeper  to  fill  up,  if  they  are  intended  for  the  use  of  a 
foreman  or  laborer. 

Form  of  Pay-Roll 

Pay-rolls  containing  dissection  columns  are  usually  un- 
necessary and  are  somewhat  cumbersome  to  handle.  Pro- 
vided the  occupation  of  each  employee  and  the  account  num- 
ber to  which  his  time  is  to  be  charged  are  definitely  stated, 
Form  10  will  generally  be  sufficient  for  both  logging  and 
sawmill  operations. 

A  dissection  of  the  pay-roll  will  be  made  up  at  the  end 
of  each  pay-roll  period,  and  the  summary  entered  from  the 
pay-roll  voucher  to  the  detailed  operating  or  construction 
ledger,  as  the  case  may  be. 

Pay-Roll  Check 

A  form  of  pay-roll  check  should  contain  merely  the 
employee's  number,  the  number  of  hours  worked,  the  rate, 
and  the  amount.  The  indorsement  should  be  so  worded  as 
to  constitute  a  full  settlement  when  signed.  More  elaborate 
forms  containing  actual  details  of  the  occupation  of  the 
employee  and  the  hours  worked  each  day  are  sometimes 
used;  but  their  preparation  throws  a  burden  on  the  pay- 
master's staff  which  outweighs  their  advantages. 

Company  Pay-Roll  Tokens 

Some  states  still  permit  the  payment  of  employees  in 
kind  rather  than  in  money.  Generally,  a  metal  or  celluloid 
token  is  used  as  the  equivalent  of  various  coins.  These  are 
redeemable,  as  a  rule,  only  at  the  company's  stores,  or  other 
stores  specified,  and  in  merchandise  only,  so  far  as  employees 
are  concerned.  When  a  pay-roll  is  provided  for  in  this 
manner,  "Company's  Pay-Roll  Tokens"  account  is  credited 
with  the  currency  value  of  the  tokens  issued,  the  various 


LOGGING    AND    SAWMILL    COSTS 


39 


operating  or  other  accounts  being  charged.  The  amount  of 
tokens  issued  is  a  direct  liability  which  must  be  liquidated  by 
money  or  money's  worth.  The  employees  exchange  the 
tokens  for  goods,  and  from  time  to  time  they  are  turned 
in  to  the  general  office  by  the  commissary  manager  or  store- 
keeper and  are  redeemed  in  cash  or  by  means  of  a  credit. 
In  either  case,  the  value  of  the  tokens  exchanged  is  charged 
to  "Company's  Pay-Roll  Tokens"  account — the  balance  on 
this  account  representing  the  liability  in  respect  of  tokens 
unredeemed. 

A  memorandum  cash  book  for  tokens  is  kept,  in  which 
the  cashier  is  charged  with  the  face  value  of  the  tokens  given 
to  him  at  the  start,  and  subsequently  redeemed  and  credited 
with  the  face  value  of  tokens  disbursed  from  time  to  time. 

Daily  Report  of  Logs  Cut  in  Woods 

The  woods  operations  are,  as  a  rule,  reported  to  the  office 
daily  on  a  form  somewhat  similar  to  that  of  Form  n. 

This  form  is  printed  on  cardboard  to  facilitate  handling, 
and  contains  details  of  the  location  of  the  logging  opera- 
tions, marks  and  numbers,  and  the  board  measure  con- 
tained in  the  various  sizes  of  logs.  These  cards  may  form 
the  basis  for  the  calculation  of  the  stumpage.  Stumpage  is 
usually  calculated  when  the  logs  are  delivered  at  some 
definite  point,  such  as  in  the  pond,  to  the  railroad,  at  a 
particular  slide,  or  to  the  mill  itself.  The  point  at  which 
stumpage  is  calculated  varies  in  accordance  with  the  prac- 
tice of  the  mill.  A  summary  of  the  logs  delivered  at  the 
point  for  stumpage  calculation  will  be  made  from  the  scale 
cards  turned  in. 

Log  Summary 

The  scale  cards  are  turned  in  daily  and  entered  in  the 
monthly  log  summary,  which  shows  the  monthly  result  of 
logging  operations  and  cumulative  totals  to  date.  (Form  12.) 


40  LUMBER    MANUFACTURING    ACCOUNTS 

Mark  Book 

In  a  number  of  cases  logs  are  floated  for  a  considerable 
distance  from  various  locations,  and  it  is  necessary  to  keep  a 
record  of  the  marks  and  feet  of  the  various  logs  handled. 
Some  mills  carry  a  great  number  of  different  marks.  A 
book  containing  a  sufficient  number  of  columns  ruled  for 
quantities  will  take  care  of  this.  Logs  belonging  to  other 
mills  will  be  separately  shown  and  paid  for  at  agreed  rates. 

Daily  Scale — Logs  Cut  by  Mill 

As  each  log  reaches  the  head  of  the  gangway  prior  to 
sawing,  it  is  scaled  and  recorded  on  Form  13. 

The  form  shown  contains  details  of  the  marks  and 
number,  the  board  feet  contained  in  each  length,  and  an 
operating  report.  Segregation  may  be  made  into  such 
classes  of  logs  as  may  be  required.  If  a  segregation  is 
made,  the  classification,  to  be  of  any  value,  must  be  carried 
out  in  its  entirety;  and  the  lumber  produced  must  be  similarly 
scaled  to  the  yard.  The  sales  journal  must  also  contain  a 
similar  segregation  so  as  to  arrive  at  the  inventory. 

Report  of  Mill  Cut 

Form  14  contains  the  details  of  the  daily  operations  for 
the  month,  showing  the  result  of  the  mill  operations  during 
the  day  and  night  shifts. 

The  details  of  the  time  and  the  log  scale  to  mill  are 
entered  from  the  daily  scale  to  the  mill  (Form  13)  and  the 
details  of  the  lumber  cut  daily  are  entered  from  the  lumber 
record  (Form  15). 

Daily  Record  of  Lumber  Cut 

The  daily  record  shown  in  Form  15  contains  details  of 
the  lumber  delivered  from  the  sorting  chain  to  the  yard,  and 


LOGGING    AND    SAWMILL    COSTS  41 

is  compiled  from  the  delivery  tickets  which  accompany  each 
buggy  load. 

At  the  end  of  each  month  the  lumber  in  the  sorting  sheds 
— but  not  delivered  to  the  piles — and  the  lumber  in  course 
of  manufacture,  is  estimated  for  inventory  purposes. 

Piling  Ticket 

As  the  lumber  is 'delivered  from  the  sorting  chain  to 
the  buggies  for  piling,  a  ticket  is  made  out  for  each  load  in 
the  form  shown  (Form  16). 

The  original  of  this  ticket  goes  to  the  general  office  and 
is  entered  on  Form  15 ;  and  if  the  piling  is  done  by  contract 
the  duplicate  is  handed  to  the  contractor,  who  turns  it  in 
as  a  voucher  to  substantiate  his  account. 


CHAPTER  V 

PUBLIC  UTILITIES  AND  OUTSIDE  OPERATIONS 

Railroads 

A  considerable  amount  of  revenue  is  frequently  derived 
from  public  utilities  such  as  railroads  and  lighting  and 
water  plants  which  were  originally  installed  for  the  benefit 
of  the  mill  itself.  A  railroad  may  have  been  installed  for 
the  purpose  of  hauling  supplies,  logs,  and  lumber  for  the 
mill;  but  as  the  country  opens  up,  a  general  freight  and 
passenger  business  develops,  in  which  case  the  road  is  gen- 
erally incorporated  as  a  separate  proposition.  In  nearly 
every  case,  such  a  road  makes  interstate  connections,  and 
the  form  of  its  accounts  is  therefore  prescribed  by  statute. 
In  the  books  of  the  mill  itself,  a  controlling  account  only  is 
necessary,  the  balance  of  this  account  being  represented  by 
the  assets  and  liabilities  of  the  railroad.  In  billing  freight, 
and  in  hauling  and  switching  charges,  the  mill  itself  should 
be  treated  in  the  books  of  the  railroad  merely  as  an  ordinary 
customer.  If  the  road  is  used  only  for  mill  purposes,  the 
cost  of  operating  will  be  distributed  over  the  various  opera- 
tions concerned,  such  as  logging,  lumber,  supplies,  etc. 

Power,  Light,  and  Water 

The  electric  power  plant  is  operated  primarily  for  the 
purpose  of  supplying  the  mill  with  power  and  light,  but  it 
frequently  supplies  also  the  mill-town  and  the  adjacent  vil- 
ages  and  farms.  It  is  customary  to  charge  flat  rates  only, 
based  on  the  number  of  lights  used,  or  per  horse-power  in 

42 


PUBLIC  UTILITIES  AND    OUTSIDE    OPERATIONS 


43 


the  case  of  a  power  load.  A  consumers  ledger  is,  of  course, 
necessary,  but  this  can  be  of  any  good  standard  form. 

With  regard  to  the  treatment  of  revenue,  derived  from 
light  and  power,  two  methods  are  in  use.  Under  the  first 
method,  the  revenue  is  credited  against  the  operating  cost, 
and  the  net  result  charged  to  the  mill ;  and  in  the  other,  the 
power  production  is  treated  as  a  separate  operating  division, 
charging  the  mill  with  power  and  light  at  cost,  and  its  con- 
sumers, presumably,  at  a  profit.  The  net  result,  so  far  as 
the  company  itself  is  concerned,  is  the  same;  but  the  latter 
method  is  the  more  scientific,  and  the  information  obtained 
is  a  useful  guide  in  fixing  rates.  Direct  costs,  such  as  main- 
tenance of  lines  to  consumers,  are  charged  against  the  con- 
sumers' revenue,  together  with  a  proportion  of  the  cost  of 
production  based  on  the  relation  between  the  kilowatt  hours 
as  metered  to  the  consumers'  distribution  lines,  and  the  total 
station  production.  Under  this  method,  the  mill  is  charged, 
as  nearly  as  possible,  with  the  true  cost  of  the  kilowatt 
hours  it  consumes,  and  the  lumber  cost  is  more  accurately 
ascertained. 

In  the  case  of  the  water  department,  it  is  usually  imprac- 
ticable to  apportion  the  costs ;  and  the  revenue  must  there- 
fore be  credited  against  the  cost  of  operations,  and  the 
resulting  balance  be  charged  to  the  mill.  As  in  the  case  of 
the  power  operations,  any  good  standard  form  will  take  care 
of  the  consumers'  accounts. 

Land  Department 

The  land  department  handles  the  sales  of  real  estate.  A 
ledger  containing  particulars  of  the  sales  is  necessary,  and 
Form  17  will  be  found  convenient. 

Details  as  to  location  of  property,  and  as  to  purchaser 
and  terms  of  payment,  are  entered  in  the  ledger.  Individual 
sales  are  entered  from  the  journal,  and  the  collections,  from 


44 


LUMBER    MANUFACTURING    ACCOUNTS 


the  cash  book.  The  total  of  the  balances  on  this  ledger  will 
agree  with  the  balance  shown  in  the  "Accounts  Receivable 
— Land  Department"  account  in  the  general  ledger. 

As  already  stated,  the  proportion  of  the  profit  on  instal- 
ment sales  of  land  which  should  be  transferred  to  Surplus, 
is  a  question  which  must  be  settled  by  the  circumstances 
of  each  particular  case.  Usually  the  whole  of  the  profit  is 
credited  at  the  time  of  the  sale,  it  being  contended  that,  as 
each  sale  is  secured,  this  course  is  legitimate.  Against  this 
argument,  however,  is  the  fact  that,  if  the  lands,  as  distinct 
from  timber,  are  carried  at  any  value  on  the  books,  the  lands 
unsold  and  probably  unsalable  will  still  remain  at  book 
value  when  logging  operations  are  completed. 

Outside  Operations 

If  outside  operations,  such  as  bending  works,  veneer 
works,  sash  and  door  factory,  etc.,  are  carried  on  in  conjunc- 
tion with  the  sawmill,  considerable  difficulty  arises  in  ascer- 
taining what  amount  should  be  charged  to  these  operations 
in  respect  of  the  product  of  the  mill  itself.  Theoretically, 
the  cost  of  the  material  used  should  be  charged;  but  this 
cost  is  practically  never  known,  and  it  is  quite  impracticable 
to  ascertain  it,  as  the  cost  of  doing  so  would  be  prohibitive 
and  the  required  result  almost  impossible  to  arrive  at.  These 
outside  operations  in  nearly  every  instance  use  special 
qualities,  cuts,  and  sizes ;  and  it  is  obvious  that  in  a  mill  of 
any  size  it  would  be  absurd  to  attempt  to  segregate  the 
costs.  Probably  the  most  practical  method  is  to  charge  out 
the  board  measure  consumed  at  the  average  cost  of  the 
general  production ;  while,  of  course,  this  cannot  be  called  a 
true  cost,  it  is  sufficiently  accurate  for  all  practical  purposes. 

The  outside  operations  here  mentioned  involve  cost  sys- 
tems too  elaborate  for  discussion  in  this  volume,  which  is 
intended  to  deal  with  the  operations  of  the  sawmill  only. 


PUBLIC  UTILITIES  AND   OUTSIDE    OPERATIONS    45 

Boarding  House  and  Hospital 

Although  they  could  hardly  be  classed  as  outside  opera- 
tions, the  boarding  house,  hospital,  stable,  and  commissary 
may  be  conveniently  considered  under  this  heading.  The 
boarding  house  is  often  handled  by  a  contractor,  and  the 
resulting  profit  or  loss  does  not  affect  the  company  one  way 
or  the  other;  if,  however,  it  is  operated  by  the  company,  it 
should  be  charged  with  all  supplies  and  wages,  and  credited 
with  the  board  bills  deducted  from  the  pay-roll.  The  profit 
or  loss  arising  from  its  operation  should  be  separately  shown. 
The  hospital,  when  operated  by  the  company,  is  treated  in 
the  accounts  in  a  similar  manner. 

Stable 

Theoretically,  the  stable  should  show  neither  a  profit 
nor  a  loss ;  but  in  actual  operation  it  is  bound  to  do  one  or 
the  other.  All  expenses  in  connection  with  the  stable — - 
feed,  wages,  depreciation,  etc. — are  charged  to  that  account, 
the  credits  being  derived  from  the  various  operating  divi- 
sions, which  are  charged  for  the  service  of  teams  at  a  per 
diem  figure  representing  the  cost  of  such  service,  as  nearly 
as  it  is  possible  to  approximate  it.  It  is  better  to  show  the 
resulting  balance  as  a  special  profit  or  loss,  rather  than  to 
attempt  to  distribute  it  over  the  operating  divisions.  Its 
effect  on  the  cost  of  lumber  is,  or  should  be,  infinitesimal. 

Commissary  and  Warehouse 

The  commissary  is  a  general  store  for  supplying  goods 
to  the  mill  employees,  and  can  be  run  on  the  same  lines  as  an 
ordinary  retail  store,  a  controlling  account  only  being  carried 
in  the  mill  books.  The  commissary  will  be  charged  with  all 
purchases  made  on  its  behalf,  and  credited  with  the  cash 
paid  in  or  deducted  from  the  pay-rolls.  The  business  of  the 
commissary  being  largely  a  credit  one,  a  form  of  ledger  is 


46  LUMBER    MANUFACTURING    ACCOUNTS 

required,  the  MacKaskey  being  probably  the  most  convenient 
pattern.  Accounts  due  by  the  various  employees  are  de- 
ducted from  the  amount  of  wages  payable  at  each  pay-roll 
period.  Goods  supplied  to  the  camps  or  other  operating 
divisions  are  credited  to  the  commissary,  and  charged  to 
operations  by  means  of  a  journal  voucher  at  the  end  of 
each  month  or  other  convenient  period. 

The  warehouse  is  charged  with  all  goods  delivered  to  it, 
and  credited  from  the  requisitions  supplied  to  camps,  com- 
missary, etc.  A  separate  account  should  be  kept  for  each 
class  of  goods.  The  balances  on  these  various  accounts 
should  agree  with  the  physical  inventory  when  taken. 


The  records  of  the  shipping  department  are  among  the 
most  important  in  a  sawmill,  as  the  selling  department  is 
very  dependent  upon  their  accuracy.  Inaccurate  billing  is  a 
source  of  annoyance  to  both  customer  and  manufacturer. 

Orders 

As  soon  as  an  order  has  been  received,  a  copy  is  made 
on  Form  18,  which  is  filed  in  the  general  office  and  forms 
part  of  the  permanent  records. 

At  the  same  time  that  the  office  copy  is  made,  an  exact 
duplicate  is  made  on  a  card  of  the  same  size,  which  is  sent 
to  the  shipping  clerk. 

Tally  Card 

As  soon  as  the  shipping  clerk  has  received  the  orders 
for  the  day,  he  enters  up  the  necessary  tally  card,  which 
contains  practically  the  same  information  as  the  order,  with 
the  exception  of  the  customer's  name.  (See  Form  19.) 

The  shipping  clerk  enters  on  this  card  the  particulars  of 
the  shipment  required,  by  pieces,  sizes,  lengths,  and  descrip- 
tions ;  and  it  is  then  given  to  the  tally  man,  who  places  it  on 
a  board  beside  the  car  which  is  being  loaded,  and  enters 
thereon  exact  details  of  the  actual  shipment.  A  separate 
card  is  used  for  each  truck  load. 

Shipments  may  be  made  direct  from  the  yard,  or  may 
come  from  either  the  dry  shed  or  planing  mill.  If  from 

47 


48  LUMBER    MANUFACTURING    ACCOUNTS 

the  dry  shed,  a  small  tally  card  similar  to  that  shown  in 
Form  20  is  made  out. 

This  card  accompanies  the  truck  from  the  shed  to  the 
loading  platform,  and  the  number  of  pieces  are  checked  and 
entered  in  the  proper  column  on  the  tally  card.  The  card 
is  placed  in  a  small  envelope,  and  eventually  returned  to  the 
general  office. 

Delivery  Card 

When  boards  are  to  be  planed,  the  delivery  card  shown 
in  Form  2 1  is  made  out. 

This  card  accompanies  the  truck  from  the  yard  or  sheds 
to  the  planing  mill,  where  its  contents  are  checked.  The 
top  half  of  the  card  is  retained,  and  at  the  end  of  the  day 
is  turned  in  to  the  general  office  as  a  record  of  the  amount 
of  work  done  by  the  planing  mill  during  that  day.  When 
the  boards  have  been  planed,  the  bottom  half  of  the  card  is 
detached,  and  accompanies  the  truck  from  the  planer  to  the 
loading  platform,  where  its  contents  are  checked  and  en- 
tered on  the  tally  sheet.  Forms  20  and  21  are  checked  by 
the  general  office  against  Form  19  as  an  additional  pre- 
caution. 

Piece  Tally  Sheet 

Details  of  the  tally  by  pieces  are  made  up  on  the  piece 
tally  sheet,  which  contains  the  working  details  for  entry  on 
the  original  tally  card  (Form  19).  Form  22  will  be  found 
convenient  for  this. 

Marginal  figures  indicating  surface  feet  can  be  printed 
in  the  first  column  of  each  section  of  the  piece  tally  sheet, 
if  desired.  This  may  save  a  little  time  when  tallying.  The 
totals  of  columns,  when  extended  and  added,  must  be  in- 
creased if  the  boards  exceed  an  inch  in  thickness. 

The  original  tally  card  (Form  19)  when  complete  is 
returned  to  the  shipping  clerk,  and  he  in  turn  sends  it,  ac- 


SHIPPING   DEPARTMENT  49 

companied  by  the  duplicate  card  of  Form  18,  to  the  invoice 
clerk,  who  makes  the  summary  of  the  shipment  on  the 
order  forms,  and  prices  and  extends  it.  The  invoice  is  then 
made  out,  one  copy  going  to  the  customer,  the  duplicate 
being  filed  with  the  selling  department,  and  the  triplicate 
filed  in  the  general  office. 

Daily  Loading  Record 

The  details  of  the  loading  are  entered  from  the  tally 
cards  on  the  summary  shown  in  Form  23. 

Car  and  Loading  Record 

Each  car  as  it  is  switched  to  the  company's  sidings  is 
entered  on  the  car  record  sheet  shown  in  Form  24. 

When  the  car  is  loaded,  full  particulars  are  entered, 
including  the  date  and  hour  released.  This  form  enables 
the  management  to  check  all  claims  for  demurrage,  etc., 
and  shows  at  a  glance  the  available  number  of  cars. 


CHAPTER  VII 

MONTHLY    AND    ANNUAL    CLOSING 

Method  of  Closing 

In  the  majority  of  cases,  lumber  manufacturing'  concerns 
close  their  accounts  monthly,  as  well  as  annually,  so  that 
the  operating  costs  may  be  more  closely  watched.  The 
method  of  closing  is  the  same  in  both  cases,  except  that  at 
the  end  of  the  fiscal  year  the  inventories  are  more  accurately 
taken  and  the  accounts  are  closed  on  the  physical  rather 
than  the  book  inventory.  Accruals  for  taxes,  interest,  in- 
surance, and  other  matters  of  like  character  are  entered; 
and  trial  balances  are  taken  of  the  customers  ledger,  of  the 
detailed  construction  ledger,  and  of  the  detailed  operating 
ledger,  and  these  are  agreed  with  the  respective  controlling 
accounts  in  the  general  ledger.  The  outstanding  vouchers 
are  listed,  and  agreed  with  the  balance  shown  on  the  Ac- 
counts Payable  account  in  the  general  ledger.  Stumpage 
is  then  calculated  at  log  scale  on  the  logs  delivered  to  the 
mill,  pond,  railroad,  or  other  point  at  which  it  has  been  de- 
cided to  calculate  the  stumpage,  and  is  debited  to  Logging 
account  and  duly  credited  to  Timber  account.  Provision  for 
the  sinking  fund  is  also  made  at  the  basic  price,  at  log 
scale  or  lumber  scale,  as  the  case  may  be,  if  the  deed  calls 
for  sinking  fund  provision  by  either  of  these  methods.  If 
the  deed  calls  for  a  definite  payment  in  consideration  of  the 
release  of  lands,  the  necessary  amount  will,  of  course,  have 
been  already  paid. 

50 


MONTHLY    AND    ANNUAL    CLOSING 


51 


Inventories 


The  inventory  of  logs  will  be  ascertained  from  the  log- 
ging records.  Owing  to  operating  conditions,  it  is  usually 
impossible  for  a  physical  inventory  to  be  taken,  especially 
where  the  logs  are  transported  by  water  or  stored  in  a  pond. 

The  inventory  of  lumber  will  be  taken,  and  the  mill  over- 
run or  underrun  ascertained.  In  case  either  is  excessive,  the 
excess  should  be  capable  of  explanation.  Most  frequently 
the  discrepancies  arise  either  in  the  scaling  of  the  logs  to 
the  mill  or  in  the  output.  Errors  of  this  character  are  ex- 
ceedingly hard  to  locate;  but  if  the  lumber  be  over  or  under- 
scaled  it  usually  shows  up  in  the  following  month. 

Except  at  the  end  of  the  year,  the  book  account  of  logs 
and  lumber  inventories  should  never  be  closed ;  but  all  other 
accounts  can  be  closed  if  desired.  If  the  inventory  is  brought 
down  each  month,  the  true  cost  is  not  ascertained.  The  cost 
price  is  arrived  at  by  taking  into  consideration  the  inventory 
at  the  beginning  of  the  year,  and  all  transactions  since  that 
time  to  the  date  of  the  accounts.  Intermediate  inventories 
must  be  ignored  in  order  to  arrive  at  the  cost  to  a  particular 
date.  The  cost  of  the  sales  during  the  month  is  ascertained 
by  multiplying  the  number  of  board  feet  sold  by  the  cost  of 
production  per  thousand  feet  to  date.  This  amount  is 
charged  to  Cost  of  Sales  and  credited  to  Lumber  account. 

In  a  number  of  mills,  particularly  the  older  ones,  the 
product  cannot  be  scaled  from  the  saw,  owing  to  structural 
arrangements;  and  in  small  mills  the  scaling  cost  is  some- 
times considered  prohibitive.  In  such  cases,  the  monthly 
inventories  must  be  more  or  less  a  matter  of  estimate.  They 
can  be  approximately  arrived  at  by  adding  to  the  log  scale 
the  percentage  of  overrun  based  on  the  actual  scale  of  an 
average  log.  At  frequent  intervals,  a  log  of  average  length 
and  diameter  should  be  accurately  scaled  from  the  saws  so 
that  the  percentage  of  overrun  may  be  properly  verified. 


52  LUMBER    MANUFACTURING    ACCOUNTS 

Calculating  Depreciation 

Depreciation  must  be  calculated  at  the  ascertained  rate, 
which  is  arrived  at  by  dividing  into  the  cost  of  the  plant 
the  number  of  available  board  feet,  and  multiplying  this 
by  the  number  of  feet  produced  during  the  period.  Special 
depreciation  is  necessary  in  connection  with  certain  items, 
particularly  in  regard  to  the  logging  equipment.  If 
"donkeys"  are  used  for  skidding  logs,  for  instance,  the 
average  life  of  wire  'ropes  is  probably  not  much  more  than 
six  months. 

Form  of  Statement 

With  regard  to  the  form  in  which  the  monthly  or  annual 
statement  should  be  shown,  the  practice  will  naturally  vary 
in  accordance  with  the  requirements  of  each  individual 
concern.  Some  forms  are  exceedingly  elaborate,  while 
others  are  so  incomplete  that  material  information  is  lack- 
ing. The  form  of  report  should  give  the  details  of  logging 
and  lumber  costs  as  extracted  from  the  detailed  operating 
ledger,  showing  the  amount  charged  under  each  heading 
and  the  cost  per  thousand  feet.  Forms  of  monthly  report 
combining  the  general  and  detailed  information  are  given 
in  Forms  25  and  26.  It  will  be  understood  that  these  are 
only  suggestive,  and,  although  similar  forms  are  actually 
in  use  and  have  been  found  satisfactory,  experience  shows 
that  the  requirements  of  the  management  often  necessitate 
more  elaborate  reports. 


CHAPTER  VIII 

DEBATABLE  POINTS  IN  LUMBER 
ACCOUNTING 

Divergent  Views 

There  are  several  important  points  in  connection  with 
lumber  accounting  which  have  never  been  settled  either  by 
accountancy  practice  or  by  the  custom  of  the  trade.  In 
fact,  widely  divergent  views  on  certain  material  questions 
are  held  by  both  lumber  men  and  accountants.  It  is  not 
proposed  to  deal  with  all  of  these  questions,  but  only  with 
the  principal  ones,  which  are  given  here  and  considered  in 
order  later  in  the  chapter. 

1 i )  Can  an  amount  be  credited  to  the  Surplus  account 
as   representing  the  unearned   increment  arising 
from  the  increased  value  of  the  standing  timber? 

(2)  Should  the  value  of  uncut  lands  be  included  as 
part  of  the  surplus? 

(3)  Is  it  legitimate  to  add  to  the  value  of  the  stand- 
ing timber,  interest  and  taxes  on  temporarily  un- 
productive areas? 

(4)  At  what  price  should  the  inventory  of  lumber  be 
valued  ? 

(5)  If  the  inventory  of  lumber  be  priced  at  cost,  what 
constitutes  true  cost? 

53 


54  LUMBER    MANUFACTURING    ACCOUNTS 

(1)  Disposition  of  Unearned  Increment 

Can  an  amount  be  credited  to  the  Surplus  account 
as  representing  the  unearned  increment  arising  from  the 
increased  value  of  the  standing  timber? 

That  the  timber  increases  in  value  by  the  passage  of 
time  is  undoubtedly  a  fact.  Increase  in  girth  and  length 
represents  a  proportionate  increase  in  the  value  of  the 
product,  but  the  growth  is  so  slow  that  it  is  practically  in- 
considerable and  is  probably  more  than  offset  by  the 
liability  to  forest  fires  and  destructive  natural  causes.  There 
is  often,  however,  a  material  increase  in  value  arising  from 
the  general  depletion  of  timber  lands  and  the  increasing 
demand  for  forest  products;  and  this  movement  cannot  be 
ignored. 

In  practice  it  will  be  found  that  alleged  increases  in 
value  are  occasionally  taken  credit  for;  but  it  cannot  be 
claimed  that  such  increases  constitute  divisible  profits. 
They  should  more  properly  be  credited  to  a  special  reserve 
account,  or  should,  at  least,  be  shown  as  surplus  not  avail- 
able for  distribution. 

(2)  Value  of  Uncut  Lands 

Should  the  value  of  uncut  lands  be  included  as  part  of 
the  surplus? 

The  value  of  lands  not  cut  over  is  wholly  problematical 
and  is  dependent  on  geographical,  climatic,  and  other  con- 
ditions. In  the  majority  of  cases  a  certain  value  exists, 
and  it  is  often  considerable;  but  granting  this,  the  land 
itself — especially  the  more  remote  portions — is  practically 
valueless,  while  the  timber  is  still  in  situ. 

As  previously  stated,  the  usual  practice  is  to  appraise 
standing  timber  only  as  security  for  a  bond  issue  and  as 
the  basis  for  the  charge  to  logging  cost;  the  method  of 


DEBATABLE  POINTS   IN  LUMBER  ACCOUNTING 


55 


appraisal  being  to  divide  the  number  of  feet,  as  cruised  and 
estimated,  into  the  book  value.  This  is  a  sound  and  con- 
servative method ;  and  at  the  outset  probably  every  lumber- 
man intends  to  follow  it.  It  will,  however,  be  found  that 
the  custom  of  writing  up  assets  is  a  popular  one  when 
times  are  bad,  and  that  the  practice  of  including  the  value 
of  uncut  lands  recommends  itself  particularly  to  a  company 
desirous  of  showing  a  substantial  surplus  to  its  stockholders 
or  bondholders.  This  custom  is  undesirable  in  many  ways, 
and  more  especially  because  in  numerous  cases  it  is  the  land 
itself  which  will  provide  for  the  return  of  the  stockholders' 
original  capital. 

In  this  respect  lumber  investments  are  different  from 
mining.  It  is  common  knowledge  that  in  a  mining  proposi- 
tion every  dividend  paid  represents  partly  profit  and  partly 
capital ;  but  the  investor  in  the  stock  of  lumber  manufactur- 
ing concerns  occasionally  views  the  matter  somewhat  differ- 
ently, because — at  least  in  some  localities — the  stockholder 
looks  to  the  timber  to  provide  dividends,  and  to  the  land 
underlying  the  timber  to  provide  for  the  return  of  the 
capital.  While  this  view  is  quite  justified  in  numerous 
cases,  there  are  many  where  it  is  not,  and  where  even  the 
value  of  the  plant  and  equipment  is  included  in  the  timber 
values,  the  land  of  itself  being  of  no  value,  or  of  such  small 
value  as  to  be  unworthy  of  consideration.  Any  amount 
taken  credit  for  by  this  means  is  undoubtedly  a  profit  which 
is  merely  estimated  and  wholly  unrealized,  and  one  which 
cannot,  on  the  face  of  it,  be  wholly  realized  until  the 
timber  resources  are  exhausted.  It  is  not  a  divisible  profit, 
and  should  therefore  be  credited  to  "Reserve  for  Apprecia- 
tion Added  to  Lands  and  Timber"  or  some  similar  account, 
or,  if  objection  is  raised  to  this  method  of  treatment,  should 
be  shown  as  an  appropriation  of  surplus,  and  expressly 
described  as  not  available  for  distribution. 


56  LUMBER    MANUFACTURING    ACCOUNTS 

(3)  Interest  and  Taxes  on  Temporarily  Unproductive  Areas 

Is  it  legitimate  to  add  to  the  ralue  of  the  standing  timber, 
interest  and  taxes  on  areas  temporarily  unproductive? 

Most  timber  propositions  are  bonded ;  and  interest  must 
be  paid  on  an  investment,  of  which  a  large  proportion  is 
unproductive.  Therefore,  the  question  as  to  what  propor- 
tion (if  any)  of  this  interest  may  legitimately  be  borne  by 
the  unproductive  part  of  the  investment,  must  be  seriously 
considered.  If  the  timber  is  not  bonded,  or  is  bonded  for 
less  than  its  actual  value,  it  would  certainly  be  undesirable 
to  add  interest  to  the  whole  investment  and  so  make  a 
bookkeeping  profit  on  the  transaction;  but  where  interest 
on  bonds  or  other  securities  has  actually  been  paid,  and  the 
proceeds  have  been  wholly  devoted  to  the  purchase  of  timber 
lands,  interest  on  unproductive  areas  probably  constitutes 
a  legitimate  capital  charge,  and  one  which  may  be  said  to 
be  sanctioned  by  custom.  It  would  be  a  hardship  in  a 
great  many  cases  should  the  common  stockholder  be  ex- 
pected to  bear  the  whole  of  the  interest  charge  on  a  proposi- 
tion, the  greater  portion  of  which  is  unproductive.  In  con- 
sidering this  question,  however,  it  must  be  borne  in  mind 
that,  when  an  issue  of  bonds  is  promoted,  it  is  invariably 
anticipated  that  the  operations  of  the  mill  will  be  sufficiently 
profitable  to  provide  for  the  payment  of  the  whole  of  the 
bond  interest  out  of  earnings  in  each  year. 

With  regard  to  taxes,  it  may  be  stated  that  the  practice 
of  adding  amounts  so  paid  on  unproductive  areas  is  almost 
universal.  In  some  cases,  the  cost  of  fire  patrol  and  pro- 
tection is  also  added  to  the  cost  of  the  standing  timber. 

If  interest  and  taxes,  etc.,  are  added  to  the  value  of 
lands  and  timber,  they  vitally  affect  the  stumpage  value. 
Stumpage  being  based  on  the  cruise  and  book  value,  all 
additions  by  way  of  purchase,  or  such  additions  in  estimated 
value  as  are  now  being  considered,  naturally  affect  the  log- 


DEBATABLE   POINTS   IN   LUMBER  ACCOUNTING 


57 


ging  cost.  In  practice,  it  is  usual  to  add  to  the  result  ob- 
tained by  dividing  the  number  of  feet  as  cruised,  into  the 
book  value,  a  certain  amount  per  thousand  feet  so  as  to  be 
on  the  safe  side;  and  this  is  done  in  spite  of  the  fact  that 
the  actual  production  usually  overruns  the  estimated  yield. 
At  the  moment,  however,  when  the  result/obtained  by 
dividing  the  number  of  feet  remaining  uncut  into  the  book 
value,  exceeds  the  figure  at  which  the  stumpage  value  has 
been  accepted  as  a  basis  for  the  charge  to  logging  account, 
the  stumpage  value  must  be  increased  proportionately,  so 
that  the  book  value  of  the  timber  may  be  entirely  exhausted 
when  the  total  area  has  been  completely  logged  off.  It  will 
thus  be  seen  that,  eventually,  operations  assume  the  whole 
of  the  cost,  including  interest  added  (if  any),  and  that  the 
addition  of  expenditures  on  unproductive  areas  merely  ap- 
portions the  cost  as  between  years. 

The  inclusion  of  interest  and  similar  additions  to  capital 
values  should  be  objected  to  in  every  case  as  constituting 
mere  "paper"  additions,  which  have  no  value  or  existence 
in  fact ;  but  cases  arise  where  such  additions  are  practically 
unavoidable  and  are  supported  by  reasonably  sound  argu- 
ments. The  accountant  called  upon  to  consider  this  difficult 
question  must  be  absolutely  satisfied  that  the  facts  of  the 
particular  case  warrant  the  inclusion,  and  must  be  very 
sure  that  he  is  in  possession  of  all  the  facts,  and  of  the 
reasons  for  the  inflation  of  values. 

If  such  additions  must  eventually  be  admitted,  it  is 
certainly  preferable  to  state  them  in  the  balance  sheet  as 
"Deferred  Charges  to  Operations,"  rather  than  to  conceal 
the  items  in  the  timber  values.  The  whole  of  the  timber 
values,  of  course,  eventually  finds  its  way  into  the  cost  of 
operations,  but  a  segregation  should  certainly  be  made  in 
the  balance  sheet  between  the  actual  value  (cost)  of  the 
timber  and  items  such  as  interest,  etc. 


5g  LUMBER    MANUFACTURING    ACCOUNTS 

(4)  Pricing  the  Inventory 

At  what  price  should  the  inventory  of  lumber  be 
valued? 

This  is  undoubtedly  one  of  the  most  difficult  questions 
in  lumber  accounting.  No  uniformity  of  practice  exists, 
and  there  are  arguments  in  favor  of  all  methods.  "Cost 
or  market  price,  whichever  is  the  lower,"  has  been  an  ac- 
cepted axiom  in  accounting  circles,  and  it  is  one  which  is 
safe,  conservative,  and  eminently  adapted  to  general 
practice.  With  regard  to  lumber  accounting,  however,  the 
situation  is  somewhat  changed,  and  other  methods  must 
be  seriously  considered  by  the  accountant,  even  at  the  risk 
of  being  termed  iconoclastic.  It  is  absolutely  necessary  to 
adopt  a  definite  basis,  and  it  is  unreasonable  to  suppose  that 
any  lumberman  would  allow  cost  price  to  be  adopted  in 
one  period  and  market  price  in  another,  or  that  he  would 
permit  some  portions  of  his  product  to  be  valued  at  market 
price  and  some  at  cost.  The  lumber  inventory  must  be 
treated  as  a  whole,  and  not  as  a  collection  of  units  requir- 
ing separate  treatment. 

There  are  three  methods  of  valuing  the  inventory  of 
lumber,  namely: 

(a)  Cost  price 

(b)  Selling    price,    less    a    deduction    for    handling 
charges,  etc. 

(c)  Fixed  price 

(a)  Cost  Price.  The  question  as  to  what  constitutes 
true  lumber  cost  is  discussed  later,  and  it  is  assumed  that 
the  actual  cost  has  been  definitely  settled  and  the  inventory 
priced  at  that  figure.  So  far  so  good ;  but  what  is  the  situa- 
tion? The  prices  obtained  in  the  Northwest  for  ordinary 
commercial  lumber,  produced  at  a  cost  of,  say,  $11  per 
thousand,  vary  from  $8.50  to  $40  per  thousand.  In  hard- 


DEBATABLE   POINTS   IN   LUMBER  ACCOUNTING 


59 


woods  the  variations  are  much  greater.  It  is  evident  that 
it  costs  precisely  the  same  amount  to  saw,  edge,  trim,  grade, 
and  pile  a  high-grade  board  as  one  of  the  lowest  grade  of 
"mill  run.!'  For  this  reason  the  cost  cannot  be  apportioned 
in  any  way  as  between  high  and  low  grades;  in  fact,  to 
attempt  to  do  so  would  be  to  destroy  the  cost  principle  at 
the  outset.  It  naturally  follows,  therefore,  that,  if  the  yard 
contains  an  overwhelming  preponderance  of  low-grade 
lumber,  the  cost  price  is  not  the  best  basis.  In  general  prac- 
tice, however,  it  will  be  found  that,  for  commercial  lumber, 
the  cost  basis  works  out  excellently,  while  for  "hardwood" 
lumber  it  does  not  always  do  so.  In  this  case,  the  prices 
vary  more  than  in  commercial  lumber,  and  the  cost  is 
higher.  There  may  be  an  active  demand  for  high-grade 
oak  or  gum,  leaving  a  high  percentage  of  low-grade  lumber 
in  the  yards;  and  if  the  inventory  be  priced  at  cost,  this 
will  result  in  anticipating  a  profit  which  is  not  only  un- 
realized, but  is  actually  unrealizable  under  any  circum- 
stances. On  the  other  hand,  presuming  that  the  low-grade 
boards  have  been  disposed  of  and  the  high-grade  lumber 
remains  in  the  pile,  the  results  for  the  year  will  in  all 
probability  show  a  loss  if  the  inventory  be  priced  at  cost, 
and  it  is  very  much  to  be  doubted  whether  the  results 
arrived  at  on  this  basis  disclose  what  has  actually  been  ac- 
complished by  the  mill  during  the  period  under  considera- 
tion. 

(b)  Selling  Price  Less  Charges.  This  method  involves 
the  grading  of  all  lumber  in  the  yards,  which  is,  of  itself,  a 
tedious  process.  After  grading,  the  lumber  is  valued  at 
the  current  market  price ;  and  a  deduction,  based  on  previous 
experience,  is  made  for  the  estimated  cost  of  handling  the 
lumber  from  the  pile  to  the  car,  and  for  breakage  and  de- 
grade. This  method  of  pricing  is  a  fairly  common  one, 


6o 

especially  among  hardwood  lumbermen;  but  it  has  little  to 
recommend  it,  inasmuch  as  it  involves  anticipated  and  un- 
realized profits  to  an  extent  which  exceeds  the  line  of  safety, 
including  profits  which,  owing  to  market  fluctuations,  may 
never  be  realized  at  all.  Accountants  invariably  dislike  to 
cut  and  slash  figures  submitted  by  a  client,  but,  where  an 
inventory  has  been  priced  on  this  basis,  such  a  proceeding 
becomes  almost  inevitable.  In  some  cases,  it  will  be  found 
that  in  addition  to  deductions  for  handling,  a  fixed  per- 
centage is  also  deducted  (10%  is  common),  but  frequently 
this  percentage  is  insufficient  to  provide  for  market  fluctua- 
tions and  selling  expenses. 

(c)  Fixed  Price.  The  term  "Fixed  Price"  has  been 
adopted  for  the  lack  of  a  better  term.  Once  the  price  under 
this  basis  is  "fixed,"  it  becomes,  in  the  absence  of  special 
conditions,  the  inventory  price  for  that  particular  grade  of 
lumber  at  each  stocktaking  period.  As  in  the  case  of  a 
valuation  at  selling  price, .  it  involves  the  grading  of  the 
lumber  in  the  yard,  and  is,  generally  speaking,  impracticable 
in  the  case  of  large  concerns  manufacturing  commercial 
lumber.  In  the  case  of  the  more  valuable  woods,  the  lumber 
is  usually  graded  at  inventory  time  in  any  case. 

The  fixed  price  for  each  grade  should  be  based  on  a 
price  below  which  the  market  has  never  fallen,  less  a  deduc- 
tion for  handling  charges,  breakage  and  de-grade,  selling 
expenses,  etc.  It  practically  means  that  the  lumber  in- 
ventory is  included  at  a  price  at  which  it  could  be  dis- 
posed of  at  any  moment. 

This  method  has  the  advantage  that  it  tends  to  produce 
more  evenness  in  results,  and  the  rate  of  profit  does  not 
fluctuate  so  much  between  periods,  as  may  be  the  case  when 
"cost"  or  "market"  is  adopted  as  the  basis  of  pricing  the 
inventory. 


DEBATABLE   POINTS  IN  LUMBER  ACCOUNTING  6l 

(5)   Cost  and  True  Cost 

If  the  inventory  of  lumber  be  priced  at  cost,  what  con- 
stitutes true  cost? 

In  considering  this  question,  it  will  be  found  that  marked 
differences  of  opinion  exist.  All  lumbermen  are  agreed  that 
logging,  pond,  and  sawmill  costs ;  power-house,  yard,  and  - 
general  operating  expenses;  and  depreciation  of  plant  and 
machinery,  should  enter  into  the  cost  of  the  lumber  in  the 
yards ;  but  as  to  whether  dry  kiln  and  planing  mill  expenses 
and  expenses  incurred  during  the  closed  period  (if  any) 
should  be  included,  there  is  no  uniformity  of  opinion.  The 
operations  of  the  dry  kiln  and  planing  mill  add  very  little, 
if  anything,  to  the  value  of  the  lumber,  except  to  make  it 
more  immediately  salable  and  to  reduce  freight  rates ;  more- 
over, it  is  probable  that  only  a  percentage  of  the  lumber  in 
the  pile  has  gone  through  these  processes;  but,  in  spite  of 
this  fact,  it  is  the  usual  custom  to  include  the  expense  of 
operating  the  dry  kiln  and  planer  as  part  of  the  lumber  cost. 
It  is  difficult  to  find  convincing  arguments  to  support  the 
inclusion  of  these  items  in  the  cost  of  manufacture,  as  they 
might  more  properly  be  termed  the  costs  of  preparing  the 
lumber  for  shipment.  They  should  not,  therefore,  be  in- 
cluded in  arriving  at  the  price  basis  for  the  inventory,  and 
it  is  unfortunate  that  general  custom  should  in  any  way 
sanction  the  inclusion  of  such  costs. 

A  number  of  mills  shut  down  during  certain  months  of 
the  year;  and  during  this  closed  period,  overhead  and  other 
expenses  are  incurred.  The  time  is  usually  occupied  in  re- 
pairing machinery,  repiling  the  lumber  in  the  yard,  and 
other  similar  operations.  These  operations  do  not,  of 
course,  add  anything  to  the  value  of  the  product,  but  are 
expenses  which  are  essential  to  the  operations  of  the  saw- 
mill, and,  as  such,  may  legitimately  be  included  as  part  of 
the  lumber  cost.  In  practice  it  will  be  found  that  they  are 


62  LUMBER    MANUFACTURING    ACCOUNTS 

invariably  included  in  arriving  at  inventory  values  in  mills 
where  the  cost  of  production  is  used  as  the  basis  of  valua- 
tion. It  may  be  found  convenient,  in  order  to  equalize  the 
expenses  incurred  during  the  closed  period,  to  charge  to 
manufacturing  cost  each  month  a  sum — based  on  previous 
experience — sufficient  to  provide  for  the  expenses  during 
the  period  in  which  the  mill  is  shut  down.  These  sums  are 
credited  to  a  reserve  account  and  the  actual  expenditures 
charged  against  them,  the  resulting  balance  being  charged 
or  credited  to  manufacturing  cost  at  the  end  of  the  closed 
period. 


CHAPTER   IX 


TECHNICAL  TERMS   USED   IN  THE  LUMBER 
BUSINESS 


Accretion 
Air-Dried 


Band  Saw 


Belting 


Board  Foot 


Increase  in  diameter  or  height. 

Lumber  dried  in  the  open  air,  as  dis- 
tinct from  lumber  which  has  been 
kiln-dried. 

An  endless  saw  for  cutting  logs.  Saw- 
ing by  band  is  more  economical 
than  by  circular,  as  the  percentage 
of  sawing  waste  is  less. 

A  ring  cut  round  the  tree  to  deaden 
or  kill  it.  This  enables  gum,  cy- 
press, etc.,  to  be  floated. 

The  contents  of  a  board  one  foot 
square  and  one  inch  thick.  This 
is  the  unit  of  measure  for  lumber 
and  logs. 

The  measuring  standard,  the  unit  of 
which  is  a  board  foot. 

A  graduated  stick  for  ascertaining 
the  contents  of  boards. 

Logs  fastened  together  used  to  hold 
floating  logs  in  place. 

A  corporation  engaged  in  handling 
and  sorting  floating  logs. 

A  weight  used  to  anchor  a  boom. 
63 


Boom  Stick 
Burner 


Caliper 
Carriage 

C.  I.  F. 

Clean  Cutting 

Clear  Length 
Commissary 

Commissary 
Checks 

Conveyor 

Cruiser 

Cull 

Cut-off  Saw 
Cutover  Lands 


Timber  forming  part  of  a  boom. 

Burners  may  be  open  or  closed,  and 
are  used  for  destroying  waste  ma- 
terial not  required  for  production 
of  power,  sale,  etc. 

An  instrument  used  for  measuring 
the  diameter  of  logs  or  trees. 

The  attachment  to  the  sawmill  used 
for  carrying  the  logs  through  the 
saw. 

Cost,  insurance,  and  freight. 

An  area  on  which  the  whole  of  the 
timber  has  been  cut. 

The  portion  of  the  stem  free  from 
branches. 

A  general  store  for  supplying  goods 
to  lumbermen. 

Form  of  order  on  the  commissary 
entitling  employee  to  receive  mer- 
chandise. 

An  endless  chain  for  carrying  lum- 
ber, refuse,  etc.,  from  the  sawmill. 

One  who  estimates  the  amount  of 
standing  timber  in  the  woods. 

Logs  rejected  or  deductions  made 
in  measuring  logs  on  account  of 
defects. 

A  saw  used  for  cutting  logs  to  re- 
quired lengths  before  entering  the 
sawmill. 

Lands  on  which  the  whole  of  the 
standing  timber  has  been  logged. 


TECHNICAL    TERMS 


Cutting  Height 

Deadening 
De-grade 

Double  Band 
Saw 


Doyle  Rule 


Drift 
Drive 


Dry  Kiln 
Edger 


The  height  above  the  ground  at  which 
a  tree  is  to  be  cut. 

(See  "Belting") 

The  amount  which  lumber  runs  under 
a  specified  grade. 

A  band  saw  containing  teeth  on  both 
edges,  which  enables  the  log  to  be 
cut  on  the  reverse  as  well  as  the 
forward  movement  of  the  carriage. 

A  rule  for  ascertaining  the  number 
of  board  feet  in  a  log  of  given 
length  and  diameter.  It  is  con- 
structed by  deducting  four  inches 
for  slab  from  the  small  end  of  the 
log,  squaring  one-quarter  of  the  re- 
mainder, and  multiplying  the  result 
by  length  of  the  log  in  feet.  Mill 
cut  usually  overruns  about  15  to 
25  per  cent  for  short  logs,  but  is 
higher  for  long  logs  with  small  top 
diameter. 

(See  "Drive") 

(1)  To   float   logs   or   timber   from 
forest  to  mill  or  shipping  point. 

(2)  A  body  of  logs  or  timbers  being 
floated  to  mill  or  shipping  point. 

A  kiln  for  quickly  drying  lumber  so 
that  it  can  be  immediately  shipped. 

A  machine  consisting  of  adjustable 
saws  for  sawing  boards  into  de- 
sired widths  and  for  removing  the 
waste  edges  from  boards. 


66 


LUMBER    MANUFACTURING    ACCOUNTS 


Filing  Room          A  room  used  by  the  filer  for  sharpen- 
ing saws. 

Flume  (i)   An  enclosed  trough  containing 

running  water  used  for  transporting 
logs. 
(2)  To  transport  logs  by  flume. 

f.  o.  b.  Free  on  board. 

Forest  Capital        The  capital  represented  by  the  forest 
land  and  standing  timber. 

Measurements  made  without  deduc- 
tion for  defects. 

An  inclined  plane  on  which  a  jack 
chain  runs,  used  for  transporting 
logs  from  the  pond  or  yard  to  the 
mill. 

Grade  To  sort  lumber  into  various  classes. 

Haul-up  (See  "Gangway") 

Hog  A  machine  for  cutting  offal  into  sizes 

suitable  for  use  under  the  boilers  or 
in  the  locomotives,  etc. 

Incinerator  (See  "Burner") 

Increment  The  value  or  volume  of  timber  pro- 

duced by  natural  growth. 

Jack  Chain  An  endless  spiked  chain  for  t-ansport- 

ing  logs  from  one  point  to  another. 

Landing  ( I )  A  place  to  which  logs  are  hauled 

prior  to  transportation. 
(2)   A  platform  where  logs  are  col- 
lected and  loaded  on  cars. 


TECHNICAL    TERMS  6 

Lath  Thin  narrow  strips  of  wood  used  in 

building  operations.  Laths  are 
made  in  three  thicknesses — single, 
half,  and  double. 

Log  Brow  (See  "Landing") 

Log  Haul  (See  "Gangway") 

Log  Rule  (i)     A    tabular    statement    of    the 

amount  of  lumber  contained  in  a 
log  of  given  length  and  diameter. 
(2)  A  graduated  stick  for  measuring 
diameters  of  logs. 

Lumber  The  principal  product  manufactured 

from  timber. 

Merchantable  The  total  length  of  stem  available  for 
Length  use. 

Merchantable  The  total  volume  of  that  portion  of 
Volume  the  tree  available  for  use. 

Mill  Pond  A  pond  near  the  sawmill  in  which  logs 

are  stored  until  required.  Ponds 
may  be  hot  or  cold.  The  hot  pond 
is  heated  by  steam  and  enables  mill 
operations  to  be  continued  during 
the  winter. 

Mill  Run  The  entire  product  of  the  mill;  gen- 

erally applied  to  board  output. 

Nigger  A  device  for  loading  logs  on  the  saw 

carriage. 

Offal  The  waste  product  of  the  board. 

Pile  ( i )  To  arrange  lumber  in  piles. 

(2)  A  stack  of  lumber  in  the  yard. 
Pile  Stick  A  board  used  for  separating  the  layers 

of  lumber  in  the  pile. 


68 


LUMBER    MANUFACTURING    ACCOUNTS 


Planing  Mill  The  place  where  boards  are  planed. 
In  the  West  the  planing  mill  is 
principally  operated  to  reduce  the 
shipping  weight  of  lumber. 

Pocket  Boom  A  boom  for  containing  logs  after  they 
are  sorted. 

Pole  A  tree  from  four  inches  to  a  foot  in 

diameter,  breast  high. 

Releasing  List  A  schedule  attached  to  a  mortgage 
describing  by  parcels  and  contents 
the  lands  covered  by  the  mortgage. 

Road  Gang  A  crew  of  men  engaged  in  cutting  and 

repairing  logging  roads. 

Scale  To  determine  the  volume  of  logs. 

Scale  Book  A  book  specially  ruled  for  recording 

the  scale  of  logs. 

Sealer  One  who  determines  the  volume  of 

logs. 

Scribner  Rule  A  log  scale  based  on  computations  de- 
rived from  diagrams  drawn  to  show 
the  number  of  inch  boards  that  can 
be  sawed  from  logs  of  different 
sizes  after  an  allowance  for  waste. 
Gives  fairly  accurate  results  for 
small  logs,  but  not  for  large.  Cut- 
ting in  sound  logs,  the  overrun  may 
be  i  o  to  20  per  cent. 

Shingle  A  thin  and  small  piece  of  wood  used 

for  roofing,  etc. 

Single  Band  A  band  saw  having  a  cutting  edge  on 

Saw  one  side  only. 


TECHNICAL    TERMS 


69 


Size 
Skid 


Skidder 


Skidway 


Slabs 
Slash 


Sorting  Boom 
Sorting  Jack 

Stand 
Standard 
Standard  Rule 


A  machine  to  dress  lumber  to  a  re- 
quired size. 

1 i )  To  draw  logs  from  the  stump  to 
the  skidway,  landing  or  mill. 

(2)  To  reinforce  a  road  by  placing 
poles  across  it. 

(3)  The  logs  upon  which  logs  are 
handled  or  piled. 

(1)  One  who  skids  logs. 

(2)  A  steam  engine  which  skids  logs 
by  means  of  a  cable. 

Two  parallel  logs  placed  at  right 
angles  to  the  road.  Logs  are 
usually  piled  upon  a  skidway  as  de- 
livered for  loading  purposes. 

Waste  product. 

1 i )  The  debris  left  after  logging. 

(2)  Land  covered  with  limbs  and  tops 
of  trees. 

A  boom  used  to  guide  logs  into  the 
sorting  jack. 

A  raft  or  platform  in  the  stream  con- 
taining an  opening  for  the  passage 
of  logs  to  be  sorted  by  marks  and 
diverted  into  pocket  booms. 

All  growing  trees  in  a  forest  or  in 
part  of  a  forest. 

A  measurement  of  quantity  used  in 
export  shipments  of  lumber. 

A  rule  based  on  comparison  with  the 
merchantable  contents  of  a  log  of 
fixed  length  and  diameter,  known  as 
a  standard  log. 


LUMBER    MANUFACTURING    ACCOUNTS 


Steam  Hauler 

Storage  Boom 
Stull 


Stump 
Stumpage 


Timber  Right 
Tram  Road 


Trimmer 


Trucks 

Turpentine 
Privileges 

Used  Length 
Used  Volume, 

Windfall 
Yield 


A  geared  locomotive  tor  hauling 
loaded  sleds  over  an  ice  road. 

A  boom  to  hold  logs  in  storage. 

Round  piling  about  10  inches  in 
diameter  used  principally  as  mine 
timbers. 

The  portion  of  the  tree  remaining  be- 
low the  cut  made  in  felling. 

The  standing  timber ;  in  other  words, 
the  value  of  the  timber  as  it  stands 
uncut. 

The  right  to  cut  or  turpentine  timber. 

A  railroad  built  and  used  for  the 
purpose  of  transporting  logs  from 
woods  to  mill. 

A  machine  consisting  of  a  series  of 
gang  saws  for  cutting  boards  into 
the  desired  lengths. 

Cars  used  for  transporting  logs  from 
woods  to  mill. 

The  right  to  extract  the  gum  from 
trees. 

The  sum  of  the  length  of  logs  cut  from 

a  tree. 
The  sum  of  the  volume  of  logs  cut 

from  a  tree. 

A  tree  blown  down  by  wind. 
The  amount  of  wood  on  a  given  area, 

or  the  amount  of  wood  which  will 

be   found  thereon  at  some   future 

time. 


Part  II — Records  Used  in  Lumber 
Manufacturing 


CHAPTER  X 

FORMS 

The  forms  submitted  on  the  following-  pages  are,  for  the 
most  part,  actually  in  use,  though  some  few  have  been 
specially  devised  to  include  the  best  features  of  several  differ- 
ent related  forms.  It  is  not  suggested  that  all  the  forms 
desirable  for  any  particular  mill  will  be  found  in  the  present 
chapter,  or  that  all  its  records  will  be  used  in  the  exact  form 
in  which  they  are  shown  here,  for  conditions  may  necessitate 
additional  information  not  provided  for  on  these,  and,  as 
already  stated,  the  management  may  have  a  good  deal  to  say 
on  the  subject  of  the  operating  forms. 

Exception  may  be  taken  to  the  fact  that  a  form  of  daily 
report  is  not  submitted,  but  it  will  be  readily  understood  that 
circumstances  and  even  location  would  have  a  marked  effect 
on  the  character  and,  therefore,  on  the  form  of  this  report. 
For  instance,  where  the  organization  is  all  under  one  roof, 
an  entirely  different  report  would  be  required  from  that 
necessary  where  the  manufacturing  operations  and  the  finan- 
cial operations  are  conducted  in  different  places.  As  a 
matter  of  fact,  a  specially  devised  form  of  daily  report  for 
each  mill  is  almost  unavoidable. 

Forms  for  the  retail  yard  are  not  submitted,  since  this 
can  reasonably  be  considered  an  entirely  separate  business. 

71 


LUMBER    MANUFACTURING    ACCOUNTS 


FORMS 


73 


TJ 


74 


LUMBER    MANUFACTURING    ACCOUNTS 


b 

1    1 

to     § 

3  5 


FORMS 


75 


aq 


o>    o 


* 

o 

O 

CO 


76 


LUMBER    MANUFACTURING    ACCOUNTS 


0 


FORMS 


77 


il 

s? 


o 


78 


LUMBER    MANUFACTURING    ACCOUNTS 


RSf 


RSI 


<n 

b. 


II; 


FORMS 


79 


l! 


8o 


LUMBER    MANUFACTURING    ACCOUNTS 


y 
a 
u. 


FORMS 


81 


u 

VD 
D 

a 


u 


: 


\ 


82 


LUMBER    MANUFACTURING    ACCOUNTS 


FORMS 


9 


84 


LUMBER    MANUFACTURING    ACCOUNTS 


FORMS 


J» 


ft! 


_J 
O 


86 


LUMBER    MANUFACTURING    ACCOUNTS 


VA 

LOCATION 
CAMF* 

ILY  REPO 
DATE 

ET  OF  LOGS  CUT  IN  WOODS 

191 

h 

AH<S 

ta- 

r  - 

SEC            ' 

Tbvvh 

i               C 

WHEKE  «*VJK«TI 

No. 
»"%,. 

Mark 

—  —  —  ——  i 

P"*""""^ 

-"-^-_ 

~^ 


p~~^_ 

L—  •  -^ 

r—  "* 

--*—  * 

<n 

• 

Sealer 

ii.    £>a%  Report  of  Logs  Cut  in  Woods.    (See  page  39.) 


FORMS 


88 


LUMBER    MANUFACTURING    ACCOUNTS 


FORMS 


89 


or  MILL 


-H 

3X 


90  LUMBER    MANUFACTURING    ACCOUNTS 


"2 
S 


FORMS 


4- 

u 

£ 

S 

09 

U- 

K 

C 

c 

0 

1 

i 

'u 

u 

Q 

j: 

j: 

t_ 

ra 

3 

•  E 

i 

N 

I 

u 

K 

ft 

1 

L 

i 

jq 

in 

C 

u 

0 

1 

i 

'C 

u 

ft 

& 

JL 

^ 

^ 

-1 

—  ' 

6 

•^ 

N 

3 

6 

4 

g 

. 

z 

,j 

ix 

vE 

2 

7 

b 

5 

1 

j 

I 

4, 


LUMBER    MANUFACTURING    ACCOUNTS 


FORMS 


93 


Date  Receive* 
Pate  Shipped 
Invoice  No 

Order  No 
Ours 
Theirs 

i 

ORDER 

191 

5>OLO  TO 

Anni?F«v«; 

?>uio  T<7 

CarN 
li 
C 
5 

F.O.B. 

Rate 

jmber 
litials 
apacii- 
eaINc 

AT 

1 

ROUTIN^ 

TEISM^ 

Pieces 

feet 

Pncz 

Amount 

Ordered 

Shipptd 

Ondered 

5h.pp«l 

•~-  

•*-^ 

—  -  

-^^^-n 

! 

•  

—  —  — 

Tallyman                                                                                                           Checked  by     , 

Form  18. 


Forw. 


page  47.) 


94 


LUMBER    MANUFACTURING    ACCOUNTS 


ORDER  No. — 

SHIP  10 

DESTINATION. 

ROUTE  VIA 

CAR  No 

CAPACITV 


ORIGINAL  TALLY 


CAR  Serin. 


INITIALS 


Pieces 


jmgth 


DescripVion 


-Tallyman 


Form  19.    Tally  Card.    (See  page  47-) 


FORMS 


95 


Date 

Order  No. 

DRY  SHED 

Pieces 

Description 

P*4v> 

Order  No 

DRY  SHED 

Pieces 

Descriptor? 

Form  20.    Dry  Shed  Tally  Card.     (See  page  47.) 


96 


LUMBER    MANUFACTURING    ACCOUNTS 


Order 

P?rl-o. 

DELIVER,  TO  PLANING  MILL 

No. 

Pieces 

Description 

F«er 

Tallyman                                              Sealer 

Order 

Datfe 

PLANED  AND  LAID  OUT 

No 

Pieces 

Description 

•    feot 

Tallyman                                             Sealer 

Form  21.     Delivery  Card.     (See  page  48.) 


FORMS 


97 


3 


£ 

3 


lU 

ti 

Q. 


Ot! 

y 

Q 

2 
o 


UJ 

a 


98 


LUMBER    MANUFACTURING    ACCOUNTS 


0) 


O 
U 

u 


5 


2 


u 

•€«- 

JP  9- 


i-  5 


•^ 

?>» 


FORMS 


99 


TOO 


LUMBER    MANUFACTURING    ACCOUNTS 


REPORT    FOC   THE    MONTH   OF 

COMPARATIVE   BALANCE.  SHEET   AS  AT                          191    AND                                  191 

ASSETS 

191 

191 

Increase 
Decrease  (Red) 

Property  and  Plant 

Current  and  Working  Aawts 

Deferred  Charges 

Sinking  Tund 

Other  Assets  (specify) 

TOTAL  ASSETS 

LIABILITIES 

191 

191 

Increase 
Decrease  (Red) 

Capital  Stock 

Bonds 

Matte  payable 

Current  Liabilities 

Reserves 

Surplus 

TOTAL   LjAjsiurncs 

PROPERTY   AND  PLANT 

CURRENT    AND    WORKING    ASSETS 

Account 

Add  »hi»  month 

To  date 

Account 

This  month 

Last  month 

Timber 

Cash  in  Ba^ks 

Timber  Riohts 

Cash  on  Hand 

Plant  ancT  Equipment 

Motes  Receivable 

Railroad  ar>d  Eauipment 

Accounts  Receivable 

Uncut  Lands 

Cut  over  Lands 

Loqs  on  Hand 

Lumber  on  Hand 

Supplies  on  Hand. 

TOTAL 

INCOME  AW  PROFIT  AND  LOSS  ACCOUNT 

ADDITIONS  TO  INCOME 

Account 

Th  15  month 

To  date 

Account 

This  month 

To  date 

Gross  Profit  on  Lumber 

Profit  -  Light  and  Fbwer 

•  Lath 

•       -  Water 

"        •  5undncs 

-Boarding  Mouse 

-  Stables" 

Miscellaneous 

Tc^-al  Gross  Profit 

TOTAL 

Selling  Expenses 

)NCOME  DEDUCTIONS 

Shipping  Expenses 

Genera  ["Expenses 

Account 

This  month 

To  date 

Total   Expenses 

Net  Profit  (Tradmo.) 

Interest  on  Bonds 

Additions  to  Income 

Other  Interest 

Total  Income 

Doubtful  Accounts 

Income  Deductions 

Miscellaneous 

NET  PROFIT 

TOTAL 

Remarks: 

Form  25.    Monthly  Statement  (left).     (See  Chapter  VII.) 


FORMS 


101 


19! 

LOGGING     ACCOUNT 

Account 

Cut 

A  mo 

jnt 

Per  looo  Feet 

Ihi»  month 

Tbdsfe 

T^ie  month 

Todatt 

This  wxintti 

Todxtt 

Srtumpaqe 

Purchased  loqs 

Woods  cost 

Transportation  and   General  Costs 

Cost  of  loqs  delivered  to  Fond 

Add  Inventory  at  commericement  of  month  or  pcn'od 

Deduct  Pond  Inventory  at  close  of  month 

Costot  loqs  cut  (log  scale)  carried  to  Lumber 

Manufacturing  Account 

LUMBER  MANUFACTURING  ACCOUNT 

Account 

Cut 

Amount 

Tfer  looc 

Feet- 

TTli*  month 

To  date 

This  month 

To  date 

This  month 

T^dajr 

Cost  of  logs  (Lumber  scale)  from  LooainaAcct 

Fbnd  Expense 

Saw  Mill  Costs       • 

Planmq  Mill  Costs 

Drv  Kiln  Costs 

Yard  Expenses 

Qeneral  Expenses 

Depreciation 

TOTAL.  EXPENSES 

Add  Inventory  at  Commencement  of  month  or  period 

Deduct  Inventory  at  dose,  of  inonth 

TOTAL.  MANUFACTURING  Cost 

LATH     MANUFACTURING  ACCOUNT 

Account 

Pieces 

Amount 

Per  looo 

iVi  13  month 

Ibdate 

Thu  month 

Todz 

re 

This  month 

Toaate 

Labor  -  ConVact 

Labor  -  Company 

Supplies 

Miscellaneous 

Maintenance  of  Equipment 

TOTAL.  EXPENSES 

Add  Inventory  at  Commencement  of  month  or  period 

Deduct  Inventory  at  close  of  month 

TOTAL  MANUFACTUIRIMQ  COST 

TRADING    ACCOUNT- 

•                                        Account 

Amo 

unt 

Per  l< 

500 

IF  •,  MrfC 

ib  date 

Thi>  month 

Tod-rti 

Lumber 

5o!ei 

Cost  of  sales 

Gross  Profit  carried  to  Profit  and  Loss  Account 

Lath 

3ales 

Cost  of  sales 

Gross  Profit  earned  to  Profit  and  Loss  Account 

Sundries 

Sales 

Cost  of  sales 

Gross  Profit   carried  TC  Profit    and  Loss  Accourrr 

RemarKs 

Form  25.    Monthly  Statement  (right). 


LUMBER    MANUFACTURING    ACCOUNTS 


DETAILED  OPERATING  REPORT 

LOQQlNQ    EXPENSE 

YARDS 

Account 

Amount 

fkrKxx 

Account 

Amount 

fkr  kxx) 

Superintendence 

Foremen  &  Assistant* 

Salaries 

Labor 

Txpenses 

Sorting  from  chain 

Foremen  and  Clerks 

Transportation  to  piles 

Salaries 

Piling 

Expenses 

Shed  ooadina 

Sealers 

General 

Salaries 

Teaming 

Expenses 

Maintenance  of  Yards 

Sowing 

Labor 

Contract  Labor 

Material 

Company  Labor 

Maintenance  of  Equipment 

Supplies 

Labor 

Maintenance  of  Camp  Buildings 

Material 

Labor 

Supplies 

Material 

Fire  protection 

Maintenance  of  Spur  tracks 

Insurance 

Labor 

General  Expenses 

Material 

Depreciation 

Maintenance  of  Equipment 

Labo- 

Material 

TOTAL  VARDS 

Road  Bui'.dmq 

DRV    KILNS 

rire  pzitrol  and  protection 

General  Expenses 

Account 

Amount 

Fkrlooo 

Depreciation 

Power 

Transportation 

Labor 

Fre'iq'it-  Railroad 

Maintenance  of"  Buildings 

Raftma 

Labor 

Teams 

Material 

Teamsters 

Maintenance  of  Equipment 

Feed  and  stable  help 

Labor 

Repairs  t-  Blacksmifhinq 

Material 

Supplies 

General  Expenses 

Depreciation 

TOTAL  Wroos  EXPENSE 

TOTAL  DRV  KILNS 

POND  EXPENSE 

POWER 

account 

Amount 

Srlooo 

Account 

Aftount 

IkrKKX 

Labor 

engineers  and  Firemen 

Supplies 

Oil  and  waste 

Labor 

Maintenance  of  Buildinqs 

Material 

Labor 

Maintenance  of  Equipment 

Material 

Labor 

Maintenance  of  Machinery  &  CquipY 

Material 

Labor 

General  Expenses 

Material 

Depreciation 

Insurance 

Ge-neral  Expenses 

Depreciation 

TOTAL  POND  EXPENSE 

Less  cost  cf  Power  sold 

SAW  MILL, 

TOTAL  POWER  EXPENSE 

Account 

Amount 

ffcrlooo 

PLANING  MIL 

L 

Rawer 

General  Labor 

Pbwer 

Supplies 

Foreman 

Maintenance  of  Buildings 

General  Labor 

Labor 

Supplies 

Material 

Maintenance  of  Buildings 

Maintenance  of  Machinery  SEquifft 

Labor 

Labor 

Material 

MoTerlai 

Maintenance  of  Machinery  Z  Bjujpr 

Insurance 

Labor 

General  expenses 

Material 

Degreooti  on 

Insurance 

General  Expenses 

Depreciation 

TOTAL  3*w  MILL  CxPENse 

T&TAL  PUANINQ  MILL  EXPENSE 

Form  26.    Detailed  Operating  Report  (left).     (See  Chapter  VII.) 


FORMS 


103 


,  TOR  THE  MONTH  Of                                                 191 

LATH    MILL 

SHIPPING    EXPENSES 

Account 

Amount 

ftriooo 

Account" 

Amount 

Power 

Salaries 

Contract  Labor 

Shipping  clerK  &.  assistants 

Company  Labor 

Labor 

Supplies 

Trucking  to  platform 

Maintenance  of"  Buildings 

Loadinq  to  cars 

Labor 

Supplies 

Material 

Car  stakes 

Maintenance  of  equipment 

Labor 

Labor 

Material 

Material 

Demurrage 

Insurance 

Miscellaneous 

General  expenses 

Depreciation 

TOTAL    LATH  h/iuu 

TOTAL  SHIPPING  EXPENSES 

SHINGLE   MILL, 

SELLING  EXPENSES 

Account 

Amount 

fferlooo 

Account 

This  month 

\.f*\  M^nth 

Logs 

Salesmen 

Contract  Labor 

Salaries 

Company  Labor 

Expenses 

Supplies 

Advertising 

Maintenance  of  Buildings 

Commissions 

Labor 

Collections 

Material 

Miscellaneous 

Maintenance  of  Equipment 

Labor 

Material 

Insurance 

General  Expenses 

TOTAL  SELLING  EXPENSE 

Depreciation 

z 

GENERAL  EXPENSES 

I 

? 

Account 

TVuS  month 

Last  mo 

IB 

Salaries  of  Officers 

Expenses  of  Officers 

Salaries  of  Clerks 

Expenses  of  Clerks 

Stationery  8,  Printing 

TOTAL  5HiN<5ue:  MILL 

Office  Supplies 

GENERAL  OPERATING   EXPENSES 

Telephone 

Postage  and  Telegrams 

Account 

Amount 

Fferiooo 

Taxes  and  Licenses 

Paymaster 

Insurance 

Timekeepers 

Legal  Expenses 

Watchmen 

Deprecation  of  Office  Bld'q. 

Maintenance  of  Fire  Apparatus 

and  Equipment 

Labor 

Miscellaneous 

Material 

Stable  Expenses 

Barn  Boss  6  Helpers 

Teed 

Repairs 

Miscellaneous 

TOTAL  GENERAL  EXPENSES 

Departmental  Trans-fersffed) 

RemarKs  : 

Taxes 

Insurance 

Injuries  and  Damaqes 

Miscellaneous 

Form  26.    Detailed  Operating  Report  (right). 


INDEX 


Accounts,  classification  of, 

Construction,  26-28. 

Operating,  28-36. 
Assets,  fixed,  11-17. 

Classification  of  timber,  14. 

Cutover  lands,  16. 

Life  of  plant — depreciation,  13,  14,  52. 

Purchase  of  real  estate,  15. 

Purchase  of  timber,  15. 

Standing  timber,  11-15,  54-57. 

Stumpage,  12,  13,  50,  56. 

Value  of  uncut  lands,  17,  54,  55. 


B 


Balance  sheet  (monthly  statement),  52. 

Forms,  100-103. 
Boarding-house,  45. 
Bonds,  timber,  11,  17,  18. 
Books.     (See  "Records  and  Forms.") 


Car  record,  49. 

Forms,  98,  99. 
Cash  book,  21. 

Forms,  74,  75. 

Memorandum,  39. 
Charges, 

Construction,  26-28. 

Operating,  28-36. 
Checks, 

Pay-roll,  38. 

Voucher,  20. 
Classification  of, 

Construction  charges,  26-28. 

Operating  charges,  28-36. 

Timber,  14. 

105 


106  INDEX 

Closing  entries,  50-53. 

Forms,  100-103. 
Commissary,  45,  46. 
Construction  charges,  26-28. 
Construction  ledger,  22. 

Forms,  76. 

Cost  price,  12-14,  58-62. 
Cost,  true,  61,  62. 
Costs,  logging  and  sawmill,  37-41. 
Customers  ledger,  22,  24. 

Forms,  81. 
Cutover  lands,  16. 


Debatable  points  in  lumber  accounting, 

Interest,  56,  57. 

Inventories,  57-62. 

Taxes,  55-57. 

Uncut  lands,  54,  55. 

Unearned  increment,  54. 
Definitions  of  technical  terms,  63-70. 
Delivery  card,  48. 

Forms,  96. 

Depreciation,  13,  14,  52. 
Distribution  expenses,  35,  36. 
Dry  kiln  expenses,  31,  32. 
Dry  shed  tally  card,  47,  48. 
Forms,  95. 

E 

Expenses, 

Construction,  26-28. 
Operating,  28-36. 

F 

Fixed  assets,  11-17. 
Fixed  price,  60. 

Forms  of  lumber  accounting  records,  72-103. 
Freight  journal,  23,  24. 
Forms,  80. 


General  expenses,  36. 
General  ledger,  19,  20. 


INDEX  107 


General  operating  expenses,  35. 

General  records,  19-25. 

Glossary  of  technical  terms,  63-70. 

H 

Hospital,  45. 

I 

Interest,  56,  57. 
Inventories,  51,  58-61. 


Journal,  20. 

Freight,  23,  24. 

Forms,  80. 
Sales,  22,  23. 

Forms,  78,  79. 
Voucher,  20,  21. 

Forms,  72,  73. 


Land  ledger,  43,  44. 

Forms,  92. 
Lands, 

Cutover,  16. 
Timber,  11-17,  54,  55. 
Uncut,  16,  17,  54,  55. 
Lath  mill  expenses,  33,  34. 
Ledger, 

Construction,  22. 

Forms,  76. 
Customers,  22,  24. 

Forms,  81. 
General,  19,  20. 
Land,  43,  44. 

Forms,  92. 
Log,  24. 

Forms,  82. 
McKaskey,  46. 
Operating,  22. 

Forms,  77. 
Timber,  24,  25. 

Forms,  83. 


108  INDEX 

Life  of  plant,  13,  14. 
Loading  record,  49. 

Forms,  98,  99. 

Logging  and  sawmill  costs,  37-41. 
Logging  expenses,  28,  29. 
Log  ledger,  24. 

Forms,  82. 
Logs, 

Report  on,  39. 

Forms,  86. 
Scaling,  40. 

Forms,  88. 
Summary  of,  39. 

Forms,  87. 
Lumber  cut,  record  of,  40,  41. 

Forms,  90. 


Mark  book,  40. 

Mill  cut,  report  of,  4U. 

Forms,  89. 
Monthly  statement,  52. 

Forms,  100-103. 


Operating  charges,  28-36. 

Administrative,  36. 

Distribution,  35,  36. 

Dry  kilns,  31,  32. 

General,  35. 

Lath  mill,  33,  34. 

Logging,  28,  29. 

Outside  expenses,  44. 

Planing  mill,  32,  33. 

Poles,  34,  35. 

Pond,  29,  30. 

Power,  32. 

Sawmill,  30. 

Selling  expenses,  36. 

Shingle  mill,  34. 

Yards,  31. 

Operating  ledger,  22. 
Forms,  77. 


INDEX  109 


Operating  report,  52. 

Forms,  102,  103. 
Orders,  47. 

Forms,  93. 
Outside  operations,  44. 


Pay-roll,  38,  39. 

Forms,  84,  85. 

Checks,  38. 

Tokens,  38,  39. 
Piece  tally  sheet,  48. 

Forms,  97. 
Piling  ticket,  41. 

Forms,  91. 

Planing  mill  expenses,  32,  33. 
Poles,  12. 

Expenses,  34,  35. 
Pond  expenses,  29,  30. 
Power  and  light,  42,  43. 

Charges,  32. 
Price, 

Cost,  12-14,  58-62. 

Fixed,  60. 

Selling,  59,  60. 

True,  61,  62. 
Public  utilities,  42,  43. 
Purchases, 

Of  real  estate,  15. 

Of  timber,  15. 


Railroads,  42. 

Real  estate,  15,  16,  43,  44. 

Forms,  92. 
Records  and  forms, 
General,  19-25. 

Cash  book,  21. 

Forms,  74,  75. 
Construction  ledger,  22. 

Forms,  76. 

Customers  ledger,  22,  24. 
Forms,  81. 


110  INDEX 

Records  and  forms  (Continued) 
General   (Continued) 

Freight  journal,  23,  24. 

Forms,  80. 

General  ledger,  19,  20. 
Journal,  20. 
Log  ledger,  24. 
Forms,  82. 
Operating  ledger,  22. 

Forms,  77. 
Orders,  47. 

Forms,  93. 
Sales  journal,  22,  23. 

Forms,  78,  79. 
Timber  ledger,  24,  25. 

Forms,  83. 
Voucher  journal,  20,  21. 

Forms,  72,  73. 
Logging  and  sawmill,  37-41. 

Daily  report  of  logs  cut  in  woods,  39. 

Forms,  86. 
Daily  record  of  lumber  cut,  40,  41. 

Forms,  90. 
Daily  scale  of  logs,  40. 

Forms,  88. 
Log  summary,  39. 

Forms,  87. 
Mark  book,  40. 
Pay-roll,  38,  39. 

Forms,  84.  85. 
Checks,  38. 
Tokens,  38,  39. 
Piling  ticket,  41. 

Forms,  91. 
Report  of  mill  cut,  40. 

Forms,  89. 
Shipping,  47-49. 

Car  loading  record,  49. 

Forms,  98,  99. 
Delivery  card,  48. 

Forms,  96. 
Orders,  47. 
Forms,  93. 


INDEX  in 


Records  and  forms  (Continued) 
Piece  tally  sheet,  48. 

Forms,  97. 
Tally  cards,  47-49. 
Forms,  94,  95. 
Reports, 

Daily,  71. 

Of  logs  cut  in  woods,  39. 

Forms,  86. 
Of  mill  cut,  40. 
Forms,  89. 
Operating,  52. 

Forms,  102,  103. 
Reserve  account,  52. 
Retail  yard,  71. 


Sale  of  real  estate,  43,  44. 

Forms,  92. 
Sales  journal,  22,  23. 

Forms,  78,  79. 
Sawmill  costs,  37-41. 
Scaling  logs,  40. 

Forms,  88. 
Selling  expenses,  36. 
Selling  price,  59,  60. 
Shingle  mill  expenses,  34. 
Shipping  department,  47-49. 
Orders,  47. 

Forms,  93. 
Records,  47-49. 

Car  loading  record,  49. 

Forms,  98,  99. 
Delivery  card,  48. 

Forms,  96. 
Piece  tally  sheet,  48. 

Forms,  97. 
Tally  cards,  47-49. 
Forms,  94,  95. 
Shipping  expenses,  35,  36. 
Sinking  fund,  18. 
Stable  charges,  45. 
Standing  timber,  11-15,  54-57. 


JJ2  INDEX 

Statements,  52. 

Forms,  100-103. 
Stumpage,  12,  13,  50,  56. 
Summary,  log,  39. 

Forms,  87. 
Surplus  account,  16,  53-55. 


Tally  cards,  47-49. 

Forms,  94,  95. 
Taxes,  56,  57. 

Technical  terms  used  in  lumber  business,  63-70. 
Timber, 

Bonds,  17,  18. 

Classification  of,  12,  14. 

Land,  11-17,  54,  55. 

Ledger,  24,  25. 
Forms,  83. 

Prices,  14. 

Purchases  of,  15. 

Rights,  11. 

Standing,  11-15,  54-57. 
Transportation  charges,  29. 
Trial  balances,  50. 
True  cost,  61,  62. 


Uncut  lands,  16,  17,  54,  55. 

Unearned  increment,  disposition  of,  54. 


Voucher  journal,  20,  21. 

Forms,  72,  73. 
Vouchers,  20,  21. 


W 


Warehouse,  46. 
Water  department,  43. 


Yard  expenses,  31. 


Graduate 


J£  SOUTHERN  REGIONAL  UBRARY  FACILITY 


A     000179173     o 


SOUTHERN    BRANCH 

UNIVERSITY  OF  CALIFORNIA 
LIBRARY 

LOS   ANGELES,  CALIF. 


